-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, UqXm/0NQeF0j8WHTTXCbdItFl/0Dbq/MawRErC3Svr9cdU6Ozu7+S5MydydlJMLi eB6tUIiXD5MtkkYagt0DMw== 0000950129-94-000366.txt : 19940513 0000950129-94-000366.hdr.sgml : 19940513 ACCESSION NUMBER: 0000950129-94-000366 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19940422 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19940506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NOBLE DRILLING CORP CENTRAL INDEX KEY: 0000777201 STANDARD INDUSTRIAL CLASSIFICATION: 1381 IRS NUMBER: 730374541 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13857 FILM NUMBER: 94526371 BUSINESS ADDRESS: STREET 1: 10370 RICHMOND AVE STE 400 CITY: HOUSTON STATE: TX ZIP: 77042 BUSINESS PHONE: 7139743131 MAIL ADDRESS: STREET 2: 10370 RICHMOND AVE STE 400 CITY: HOUSTON STATE: TX ZIP: 77042 8-K 1 FORM 8-K -- NOBLE DRILLING CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): APRIL 22, 1994 NOBLE DRILLING CORPORATION (Exact name of registrant as specified in is charter) Delaware 0-13857 73-0374541 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 10370 Richmond Avenue, Suite 400, Houston, Texas 77042 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 974-3131 2 Item 2. Acquisition or Disposition of Assets. On April 22, 1994, Noble Drilling Corporation (the "Company") acquired all of the issued and outstanding shares of common stock, no par value (the "Shares"), of Triton Engineering Services Company, a Texas corporation ("Triton"), from Joseph E. Beall ("Beall") and George H. Bruce ("Bruce") (Beall and Bruce being sometimes referred to herein collectively as "Sellers"), pursuant to the terms of the Stock Purchase Agreement (the "Agreement") dated April 22, 1994 among the Sellers, Triton and the Company. The following statements are subject to the detailed provisions of the Agreement and are qualified in their entirety by reference to the Agreement, a copy of which is filed as Exhibit 2.1 to this report. Triton is engaged, through its subsidiaries, in providing engineering, consulting and turnkey drilling services, and manufacturing and rental of oil field equipment, for the oil and gas industry. The principal subsidiaries of Triton include Triton International, Inc., Triton USA, Inc., Triton Engineering Services Company, S.A., Triton International Limited, Triton Engineering Services Company Limited, Triton Tool & Supply, Inc. and Threadneedle Oil Company. Triton was founded by Beall in 1977, and Beall will continue to serve as Triton's president pursuant to an employment agreement between Beall and Triton dated April 22, 1994 (the "Employment Agreement"). The Employment Agreement has a primary term through April 22, 1997. A copy of the Employment Agreement is filed as Exhibit 10.2 to this report and is incorporated herein by reference. The principal executive offices of Triton are located at 1201 Dairy Ashford, Houston, Texas, 77079. In consideration for the Shares, the Company (i) delivered to Beall 751,864 shares of its Common Stock, par value $.10 per share ("Common Stock"), cash in the amount of $3,938,240.00 and a promissory note in the amount of $3,938,240.00, and (ii) delivered to Bruce cash in the amount of $146,266.10 and a promissory note in the amount of $61,760.00. The promissory notes of the Company mature on October 21, 1994. In addition, the Company has a contingent obligation at the end of two years to pay to the Sellers additional consideration, including up to 254,551 shares of Common Stock, subject to reduction as a result of certain events, as well as a determinable number of additional shares in the event Triton achieves certain operating results in 1994. In determining the amount of consideration to be paid for the Shares, the Company conducted a due diligence review of Triton and a physical examination and inspection of certain assets of Triton and its subsidiaries. The Shares were given value based on the Company's assessment of the current financial condition, assets, businesses and prospects, as well as the historical financial and operating results, of Triton and its subsidiaries. Concurrently with the closing of the Agreement, the Company and Beall also entered into a registration agreement dated as of April 22, 1994 (the "Registration Agreement") pursuant to which the Company agreed, subject to the terms and conditions of the Registration Agreement, to prepare and file a shelf registration statement on Form S-3 (the "Registration Statement") and pursuant to Rule 415 under the Securities Act of 1933, as amended, covering the sale by Beall of two-thirds of the number of shares of Common Stock delivered to Beall on April 22, 1994. The Company further agreed pursuant to the terms of the Registration Agreement to use its best efforts to keep the Registration Statement effective through April 22, 1996. A copy of the -2- 3 Registration Agreement is filed as Exhibit 10.1 to this report and is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. It is impractical to provide at this time the financial statements required by Item 7(a) of Form 8-K. Pursuant to Item 7(a)(4) of Form 8-K, such financial statements will be filed as soon as they are available and on or before July 8, 1994. (b) Pro Forma Financial Information. It is impractical to provide at this time the pro forma financial information required by Item 7(b) of Form 8-K. Pursuant to Item 7(b)(2) of Form 8-K, such pro forma financial information will be filed as soon as it is available and on or before July 8, 1994. (c) Exhibits. Exhibit 2.1 - Stock Purchase Agreement dated April 22, 1994 among Beall, Bruce, Triton and the Company (Exhibits 6.6 through 8.4 and the Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish to the Commission a copy of any omitted Exhibit or Schedule upon request). Exhibit 10.1 - Registration Agreement dated April 22, 1994 between the Company and Beall. Exhibit 10.2 - Employment Agreement dated April 22, 1994 between the Company and Beall. Exhibit 10.3 - Lease Indemnity Agreement dated April 22, 1994 among Beall, Triton, 1201 Dairy Ashford Ltd. and the Company. Exhibit 99.1 - News release dated April 25, 1994. -3- 4 SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: May 6, 1994 NOBLE DRILLING CORPORATION By: /s/ BYRON L. WELLIVER Byron L. Welliver, Senior Vice President-Finance and Treasurer -4- 5 INDEX TO EXHIBITS Exhibit Sequentially Number Exhibit Numbered Page ------- ------- ------------- 2.1 - Stock Purchase Agreement dated April 22, 1994 between Beall, Bruce, Triton and the Company. 10.1 - Registration Agreement dated April 22, 1994 between the Company and Beall. 10.2 - Employment Agreement dated April 22, 1994 between the Company and Beall. 10.3 - Lease Indemnity Agreement dated April 22, 1994 among Beall, Triton, 1201 Ashford Ltd. and the Company. 99.1 - News release dated April 25, 1994. -5- EX-2.1 2 STOCK PURCHASE AGREEMENT DATED APRIL 22, 1994 1 STOCK PURCHASE AGREEMENT by and among JOSEPH E. BEALL, GEORGE H. BRUCE, TRITON ENGINEERING SERVICES COMPANY and NOBLE DRILLING CORPORATION April 22, 1994 2 TABLE OF CONTENTS
PAGE STOCK PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE I TERMS OF THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Agreement to Sell and to Purchase Shares . . . . . . . . . . . . . . . . . . . . 1 1.2 Purchase Price and Payment at Closing . . . . . . . . . . . . . . . . . . . . . . 1 1.3 Payment of Additional Consideration . . . . . . . . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.4 Adjustments Regarding Additional Consideration . . . . . . . . . . . . . . . . . 3 1.5 Buyer's Option to Deliver Cash in Lieu of Buyer Common Stock . . . . . . . . . . 4 1.6 Specific Contingent Assets Collected on or before the Fourth Anniversary . . . . 4 1.7 Option Holder Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ARTICLE II CLOSING AND CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 6 3.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.2 Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.3 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.4 Capitalization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.5 Authority Relative to This Agreement . . . . . . . . . . . . . . . . . . . . . . 7 3.6 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3.7 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.8 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.10 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.11 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.12 Investment Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.13 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.14 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . 12 3.15 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.16 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.17 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.18 Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.19 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.21 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.22 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 3.23 Employee Confidentiality Agreements . . . . . . . . . . . . . . . . . . . . . . 18 3.24 Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 3.25 Financial Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.26 Bank Accounts and Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . 19 3.27 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.28 Illegal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.29 Offerings of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 3.30 Brokerage Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
i 3 3.31 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 3.32 Representations and Warranties on Closing Date . . . . . . . . . . . . . . . . . . 20 3.33 No Other Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . 20 4.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4.2 Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 4.3 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.4 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.5 Authority Relative to This Agreement . . . . . . . . . . . . . . . . . . . . . . . 21 4.6 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.7 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.8 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.9 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.10 Transaction Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.11 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.12 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.13 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.14 Brokerage Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.15 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.16 Representations and Warranties on Closing Date . . . . . . . . . . . . . . . . . . 23 4.17 No Other Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 ARTICLE V CONDUCT OF COMPANY PENDING CLOSING . . . . . . . . . . . . . . . . . . . . . 23 5.1 Conduct and Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . 23 5.2 Restrictions on Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . 24 ARTICLE VI ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 6.1 Access to Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . 26 6.2 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 6.3 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 6.4 Reasonable Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 6.5 HSR Act Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 6.6 Agreement Regarding Registration . . . . . . . . . . . . . . . . . . . . . . . . . 27 6.7 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 6.8 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 6.9 Company Employee Bonus Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 6.10 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . 28 6.11 Amendment of Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 6.12 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 6.13 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 6.14 Survival of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 6.15 Negotiation Regarding Outstanding Options . . . . . . . . . . . . . . . . . . . . 29 6.16 Director and Officer Insurance and Indemnification . . . . . . . . . . . . . . . . 29 6.17 Agreement Regarding Indemnification for Certain Rental Obligations . . . . . . . . 29 ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLERS . . . . . . . . . . . . . . . . . . . . 29 7.1 Representations and Warranties True . . . . . . . . . . . . . . . . . . . . . . . . 29 7.2 Covenants and Agreements Performed . . . . . . . . . . . . . . . . . . . . . . . . 29 7.3 Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ii 4 7.4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 7.5 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 7.6 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 7.7 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 7.8 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 7.9 Payment of Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 7.10 Registration Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 7.11 1201 Dairy Ashford, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 ARTICLE VIII CONDITIONS TO OBLIGATIONS OF BUYER . . . . . . . . . . . . . . . . . . . . . 31 8.1 Representations and Warranties True . . . . . . . . . . . . . . . . . . . . . . . . 31 8.2 Covenants and Agreements Performed . . . . . . . . . . . . . . . . . . . . . . . . 31 8.3 Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 8.4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 8.5 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 8.6 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 8.7 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 8.8 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 8.9 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 8.10 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 8.11 Cancellation of Outstanding Options . . . . . . . . . . . . . . . . . . . . . . . 32 8.12 Lease Indemnity Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 ARTICLE IX TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . 33 9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 9.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 9.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 9.5 DTPA Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 9.6 Exclusive Remedy for Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 ARTICLE X TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 10.1 Liability for Taxes, Filing Returns . . . . . . . . . . . . . . . . . . . . . . . 34 10.2 No Section 338 Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 10.3 Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 ARTICLE XI RESTRICTIONS ON SALES, OTHER DISPOSITIONS . . . . . . . . . . . . . . . . . . 35 11.1 Restrictions on Sales, Other Dispositions . . . . . . . . . . . . . . . . . . . . 35 ARTICLE XII SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 12.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 12.2 Indemnification by Beall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 12.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 12.4 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 12.5 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 37 12.6 CERTAIN DAMAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 ARTICLE XIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
iii 5 13.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 13.3 Binding Effect; Assignment; No Third Party Benefit . . . . . . . . . . . . . . . . 39 13.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 13.5 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 13.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 13.7 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 13.8 Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 13.9 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 13.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 13.11 Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 13.12 Jurisdiction and Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 13.13 Joinder of Spouses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 13.14 Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 ARTICLE XIV DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 14.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 14.2 Certain Additional Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 42
iv 6 ANNEX, EXHIBITS AND SCHEDULES Annex I Allocation of Purchase Price Exhibit 1.2 Form of Promissory Note Exhibit 1.7 Option Holder Allocation Exhibit 6.6 Form of Registration Agreement Exhibit 6.7 Form of Employment Agreement Exhibit 6.17 Form of Lease Indemnity Agreement Exhibit 7.4 Form of Opinion of Counsel to Buyer Exhibit 8.4 Form of Opinion of Counsel to Sellers and the Company Schedule 1.3(a)(ii) Company or Subsidiary Specified Claims and Accounts Receivable Schedule 3.2 Company and Subsidiary Qualifications Schedule 3.3 Company Records Schedule 3.4 Company or Subsidiary Obligation to Repurchase Schedule 3.6(a) Contravention of Charter Documents and Contracts - Company Schedule 3.6(b) Contravention of Contracts - Sellers Schedule 3.7 Company and Subsidiary Governmental Approvals Schedule 3.8 Company and Subsidiary Proceedings Schedule 3.9(a) Company and Subsidiary Insurance Policies Schedule 3.9(b) Company and Subsidiary Insurance Claims Schedule 3.10 Subsidiaries Schedule 3.14 Company and Subsidiary Liabilities Schedule 3.15 Company and Subsidiary Changes Schedule 3.16 Company and Subsidiary Tax Matters Schedule 3.18 Company and Subsidiary Agreements Schedule 3.19 Company and Subsidiary Employee Plans Schedule 3.20 Company and Subsidiary Environmental Matters Schedule 3.21 Company and Subsidiary Labor Relations Schedule 3.22 Company and Subsidiary Employees Schedule 3.24 Company and Subsidiary Insider Interests Schedule 3.25 Company and Subsidiary Financial Requirements Schedule 3.26 Company and Subsidiary Bank Accounts and Powers of Attorney Schedule 4.2 Buyer Qualifications Schedule 4.6(a) Contravention of Charter Documents - Buyer Schedule 4.7 Buyer Governmental Approvals Schedule 4.13 Buyer Changes Except for Annex I and Exhibits 1.2 and 1.7, the foregoing have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted Exhibit or Schedule to the Commission upon request. v 7 STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of April 22, 1994, among TRITON ENGINEERING SERVICES COMPANY, a Texas corporation (the "Company"), JOSEPH E. BEALL ("Beall"), GEORGE H. BRUCE ("Bruce") (Beall and Bruce being sometimes referred to herein individually as a "Seller" and collectively as "Sellers"), and NOBLE DRILLING CORPORATION, a Delaware corporation ("Buyer"), W I T N E S S E T H: WHEREAS, Sellers own in the aggregate all the outstanding shares of Common Stock, no par value, of the Company (the "Shares"); and WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, the Shares; and WHEREAS, the Company desires to join in the execution of this Agreement for the purpose of evidencing its consent to the consummation of the foregoing transaction and for the purpose of making certain representations and warranties to and covenants and agreements with Buyer; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Company, Sellers and Buyer hereby agree as follows: ARTICLE I TERMS OF THE TRANSACTION 1.1 Agreement to Sell and to Purchase Shares. At the Closing, and on the terms and subject to the conditions set forth in this Agreement, each Seller shall sell and deliver to Buyer, and Buyer shall purchase and accept from each Seller, the number of Shares set forth opposite the name of such Seller on Annex I. 1.2 Purchase Price and Payment at Closing. In consideration of the sale of the Shares to Buyer, Buyer shall pay to Sellers at the Closing an aggregate purchase price (the "Purchase Price") consisting of (i) 763,655 shares (the "Buyer Shares") of Common Stock, par value $.10 per share, of Buyer ("Buyer Common Stock"), (ii) $4,000,000 in cash and (iii) $4,000,000 evidenced by two promissory notes of Buyer. The Purchase Price shall be allocated between Sellers as set forth on Annex I. The allocable portion of the Purchase Price payable to each Seller shall be paid at the Closing to such Seller as follows: (a) Each Seller shall receive the number of Buyer Shares set forth opposite the name of such Seller on Annex I; provided, however, that Buyer shall have the right and option (but not the obligation) to pay Bruce in cash in lieu of delivering the allocable number of Buyer Shares to Bruce (based on the per share price equal to the average of the last sale price of the Buyer Common Stock (as reported by NASDAQ/NMS) for the 30 trading days ending on the second business day prior to the Closing Date). (b) The "Cash Amount" set forth opposite the name of such Seller on Annex I shall be paid to such Seller at the Closing in the form of a bank cashier's check payable to the order of such Seller or, if requested by such Seller, in immediately available funds by confirmed wire transfer to a bank 8 account to be designated by such Seller (such designation to occur no later than the second business day prior to the Closing Date). (c) Buyer shall deliver to such Seller a promissory note of Buyer, dated the Closing Date, payable to the order of such Seller in a principal amount equal to the "Note Amount" set forth opposite the name of such Seller on Annex I (the "Note"). The principal of and accrued interest on each Note shall be payable on such date as Buyer shall determine but in no event later than six months after the Closing Date. The unpaid principal of each Note shall bear interest at the prime rate announced or published from time to time by NationsBank of Texas, N.A. (or if such bank ceases to declare a prime rate, the rate of interest designated by such bank in lieu thereof). Each Note shall represent the unsecured, general obligation of Buyer. Each Note shall be in substantially the form set forth as Exhibit 1.2. 1.3 Payment of Additional Consideration. (a) In addition to the Purchase Price, Buyer shall pay to Sellers, subject to the terms and conditions of this Agreement and within 10 business days after the second anniversary of the Closing Date (the "Determination Date"), additional consideration in shares of Buyer Common Stock (the "Additional Shares") as follows: (i) 254,551 shares of Buyer Common Stock; plus (ii) if the calculation of the Net Claim Amount under this Section 1.3(a)(ii) as of the Determination Date results in a positive number, then the number of shares of Buyer Common Stock that is obtained by dividing the Net Claim Amount as of the Determination Date by $7.90, multiplying the quotient by 0.8618968 and rounding the product to the nearest whole number. The "Net Claim Amount" for any period shall mean 60 percent of an amount equal to the Specific Contingent Assets collected during such period minus the Specific Contingent Liabilities discharged during such period. For the purposes of this Agreement, "Specific Contingent Assets" shall mean an amount equal to (A) the net proceeds, if any, paid to the Company or a Subsidiary from the claims and accounts receivable specifically identified on Schedule 1.3(a)(ii) minus (B) $1,886,834 (the "1993 Deficit Amount"). For the purposes of this Section 1.3(a)(ii), "net proceeds" shall mean the gross proceeds, if any, paid to the Company, a Subsidiary or Buyer less all reasonable out-of-pocket costs of the Company, a Subsidiary or Buyer pursuing the Specific Contingent Assets including, but not limited to, attorneys' fees, experts' fees and discovery costs. Buyer, the Company and Beall agree (x) to use their respective reasonable best efforts in pursuing such claims and (y) to consult with each other prior to settlement thereof. For the purposes of this Agreement, "Specific Contingent Liabilities" shall mean the amount, if any, payable by Beall pursuant to the provisions of Article XII on account of an obligation under Section 12.2(b)(ii). To the extent, but only to the extent, such indemnification obligations constitute Specific Contingent Liabilities and are therefore satisfied pursuant to the operation of this Section 1.3(a)(ii), they shall not also be recoverable under the provisions of Article XII; plus (iii) the number of shares of Buyer Common Stock that is obtained by dividing (A) an amount equal to 43.09484 percent of Adjusted Excess 1994 EBDIT by (B) the per share price equal to the average of the last sale price of the Buyer Common Stock (as reported by NASDAQ/NMS) for the 30 trading days immediately preceding the issuance of the Company's audit report for the year ending December 31, 1994, and rounding the quotient to the nearest whole number. "Adjusted Excess 1994 EBDIT" is the amount, if any, equal to (x) the 2 9 Company's 1994 audited earnings before interest expense, interest income, depreciation expense, amortization expense and income tax ("EBDIT") in excess of $10.0 million (the "Excess 1994 EBDIT") plus or minus, as the case may be, (y) the amount of the adjustments to the Excess 1994 EBDIT, if any, as determined in accordance with the remainder of this Section 1.3(a)(iii). In determining Adjusted Excess 1994 EBDIT, the parties agree to decrease the Excess 1994 EBDIT as reflected in the Company's 1994 audited consolidated financial statements by the amount of EBDIT attributable to the excess, if any, of any Specific Contingent Assets accrued as of December 31, 1994 over any Specific Contingent Liabilities accrued as of December 31, 1994 and by the amount of EBDIT, if any, from Company projects attributable to Buyer and its affiliates (exclusive of the Company and its Subsidiaries), and to increase the Excess 1994 EBDIT by the amount, if any, of additional expenses incurred by the Company and the Subsidiaries following the Closing Date solely attributable to Buyer's ownership of the Company. Buyer agrees to confer with Beall if Buyer desires to refer any specific projects to the Company, and Buyer and Beall shall agree, in connection with the Company's commencement of work on any such project, what portion, if any, of the earnings attributable to such project shall be subtracted in calculating Adjusted Excess 1994 EBDIT. In the absence of such agreement, no decrease in earnings shall be made. Buyer and Beall further agree that the expenses historically incurred by the Company shall not, for the purposes of determining Adjusted Excess 1994 EBDIT, be materially increased by or on behalf of Buyer following the Closing Date (whether through the increase of existing expenses or the imposition of new expenses) unless such expenses are agreed to by Beall. (b) The Additional Shares shall be allocated between Sellers in the percentages that the Purchase Price is allocated between Sellers on Annex I. (c) To the extent a Determination Date Rental Indemnification Amount (as such term is defined in the Lease Indemnity Agreement (as defined in Section 6.17)) is due by Beall to Buyer, the number of Additional Shares payable to Beall, if any, pursuant to Section 1.3(a) shall be reduced by the number of shares of Buyer Common Stock that is obtained by dividing the Determination Date Rental Indemnification Amount by the per share price equal to the average of the last sale price of the Buyer Common Stock (as reported by NASDAQ/NMS) for the 30 trading days immediately preceding the Determination Date, and rounding the quotient to the nearest whole number (the "Rental Indemnification Shares"). If the number of Rental Indemnification Shares exceeds the number of Additional Shares payable to Beall pursuant to Section 1.3(a), then Buyer shall not be under any obligation to issue any Additional Shares to Beall, and Beall shall pay to Buyer or its assignee in cash the value of the shares of Buyer Common Stock constituting such excess, based on the price per share specified in the immediately preceding sentence. Any such cash payment shall be made to Buyer or its assignee within 10 business days after the Determination Date. 1.4 Adjustments Regarding Additional Consideration. (a) If the calculation of the Net Claim Amount under Section 1.3(a)(ii) as of the Determination Date results in a negative number, then the Net Claim Amount (disregarding the negative sign) shall be divided by $7.90, and the quotient rounded to the nearest whole number. The result of the calculation in the immediately preceding sentence shall be referred to herein as the "Number of Claim Shares." The number of shares of Buyer Common Stock otherwise deliverable under Section 1.3 (the "Section 1.3 Shares") shall be reduced by the Number of Claim Shares if the result of such subtraction is a positive number. 3 10 (b) If the subtraction of the Number of Claim Shares from the number of Section 1.3 Shares under Section 1.4(a) results in a negative number of shares, then Buyer shall not be under any obligation to issue any Additional Shares, and Buyer shall continue to have the right to receive indemnification by Beall pursuant to the terms and conditions of Article XII for the value of the number of shares so calculated (disregarding the negative sign) based on the per share price of $7.90. 1.5 Buyer's Option to Deliver Cash in Lieu of Buyer Common Stock. Notwithstanding anything contained in Section 1.3 to the contrary, Buyer shall have the right and option (but not the obligation) to pay Bruce in cash in lieu of delivering the allocable amount of the Additional Shares to him. The amount of cash so paid shall be based on the per share price equal to the average of the last sale price of the Buyer Common Stock (as reported by NASDAQ/NMS) for the 30 trading days immediately preceding the Determination Date. Any such cash payment shall be made to Bruce within 10 business days after the Determination Date. 1.6 Specific Contingent Assets Collected on or before the Fourth Anniversary. (a) If during the period beginning on the Determination Date and ending on the third anniversary of the Closing Date (the "Third Anniversary"), there exists a Net Claim Amount (determined without regard to the 1993 Deficit Amount) that is a positive number, then Buyer shall pay to Sellers, within 10 business days after the Third Anniversary, the number of shares of Buyer Common Stock that is obtained by dividing the Net Claim Amount for such period by $7.90, multiplying the quotient by 0.8618968 and rounding the product to the nearest whole number. If during the period beginning on the Third Anniversary and ending on the fourth anniversary of the Closing Date (the "Fourth Anniversary"), there exists a Net Claim Amount (determined without regard to the 1993 Deficit Amount) that is a positive number, then Buyer shall pay to Sellers, within 10 business days after the Fourth Anniversary, the number of shares of Buyer Common Stock that is obtained by dividing the Net Claim Amount for such period by $7.90, multiplying the quotient by 0.8618968 and rounding the product to the nearest whole number. The contingent amounts payable to Sellers pursuant to this Section shall be allocated between Sellers in the percentages that the Purchase Price is allocated between Sellers on Annex I. Notwithstanding anything contained in this Section to the contrary, Buyer shall have the right and option (but not the obligation) to pay Sellers in cash in lieu of delivering the contingent amounts payable to Sellers pursuant to this Section in shares of Buyer Common Stock. The amount of cash so paid shall be based on the per share price equal to the average of the last sale price of the Buyer Common Stock (as reported by NASDAQ/NMS) for the 30 trading days immediately preceding the Third Anniversary or Fourth Anniversary, as the case may be. Any such cash payment shall be made to Sellers within 10 business days after the Third Anniversary or Fourth Anniversary, as the case may be. Buyer shall have no obligation to Sellers with respect to the amount of any Specific Contingent Assets collected after the Fourth Anniversary. (b) If the calculation of the Net Claim Amount (determined without regard to the 1993 Deficit Amount) during the period beginning on the Determination Date and ending on the Third Anniversary results in a negative number, then Buyer shall not be under any obligation to issue any additional shares of Buyer Common Stock, and Buyer shall continue to have the right to receive indemnification by Beall pursuant to the terms and conditions of Article XII. If the calculation of the Net Claim Amount (determined without regard to the 1993 Deficit Amount) during the period beginning on the Third Anniversary and ending on the Fourth Anniversary results in a negative number, then Buyer shall not be under any obligation to issue any additional shares of Buyer Common Stock, and Buyer shall continue to have the right to receive indemnification by Beall pursuant to the terms and conditions of Article XII. 4 11 1.7 Option Holder Compensation. (a) Subject to the occurrence of the Closing, Buyer agrees to cause the Company to pay to the Option Holders (as defined in Section 3.4) in shares of Buyer Common Stock in the aggregate an amount the value of which approximates (i) 13.81032 percent of 60 percent of the Specific Contingent Assets, if any, collected during each of the periods ending on the Determination Date, the Third Anniversary and the Fourth Anniversary, as the case may be, plus (ii) 6.90515 percent of Adjusted Excess 1994 EBDIT. (b) The amounts described in Section 1.7(a) shall be allocated among the Option Holders as shown on Exhibit 1.7. Such amounts shall be delivered (x) with respect to clause (i) of Section 1.7(a), within 10 business days after the Determination Date, the Third Anniversary or the Fourth Anniversary, as the case may be, and (y) with respect to clause (ii) of Section 1.7(a), within 10 business days after receipt by Buyer of the 1994 audit report of the Company. (c) The number of shares of Buyer Common Stock that is to be paid pursuant to clause (i) of Section 1.7(a) is obtained by dividing the amount described in such clause by $7.90, and rounding the quotient to the nearest whole number. The number of shares of Buyer Common Stock that is to be paid pursuant to clause (ii) of Section 1.7(a) is obtained by dividing the amount described in such clause by the per share price equal to the average of the last sale price of the Buyer Common Stock (as reported by NASDAQ/NMS) for the 30 trading days immediately preceding the issuance of the Company's audit report for the year ending December 31, 1994, and rounding the quotient to the nearest whole number. Notwithstanding anything contained in this Section to the contrary, Buyer shall have the right to deliver cash in lieu of Buyer Common Stock pursuant to this Section for any reason, including, but not limited to, if Buyer determines that shares of Buyer Common Stock cannot be delivered pursuant to exemptions from registration under applicable federal and state securities laws. In the event Buyer shall elect to deliver cash to the Option Holders in lieu of Buyer Common Stock pursuant to the terms of this Section 1.7(c), the amount of cash so paid shall be based on the per share price equal to the average of the last sale price of Buyer Common Stock (as reported by NASDAQ/NMS) for the 30 trading days immediately preceding the Determination Date, the Third Anniversary or the Fourth Anniversary, as the case may be. Any such cash payment shall be made to such Option Holders within 10 business days after the Determination Date, the Third Anniversary or the Fourth Anniversary, as the case may be. Each recipient of any Buyer Common Stock shall make such representations and warranties to and covenants and agreements with Buyer as Buyer shall determine are reasonably necessary to comply with applicable federal and state securities laws. ARTICLE II CLOSING AND CLOSING DATE The closing of the transactions contemplated hereby (the "Closing") shall take place (i) at the offices of Thompson & Knight, P.C., 1700 Texas Commerce Tower, 600 Travis, Houston, Texas 77002, at 10 a.m., local time, on the later of (x) April 22, 1994 or (y) the third business day following the satisfaction or waiver (subject to Applicable Law) of each of the conditions to the obligations of the parties set forth in Articles VII and VIII, or (ii) at such other time or place or on such other date as the parties hereto shall agree. The date on which the Closing is required to take place is herein referred to as the "Closing Date". 5 12 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY Sellers and the Company jointly and severally (except with respect to the representations and warranties set forth in Sections 3.5(b), 3.6(b), 3.11 and 3.12, which are made by each Seller (i) severally and not jointly and (ii) only as to such Seller and not any other Seller and except further that all such representations and warranties of Bruce (except for Sections 3.5(b), 3.6(b), 3.11 and 3.12) are limited to the best knowledge of Bruce without any duty of independent investigation) represent and warrant to Buyer that: 3.1 Corporate Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and corporate authority to own, lease and operate its properties and to carry on its business as now being conducted. No actions or proceedings to dissolve the Company are pending. 3.2 Qualification. Each of the Company and the Subsidiaries is duly qualified or licensed to do business and each of the Company and the Corporate Subsidiaries is in good standing in each of the jurisdictions set forth opposite its name on Schedule 3.2, which are all the jurisdictions in which the property owned, leased or operated by it or the conduct of its business requires such qualification or licensing, except jurisdictions in which the failure to be so qualified or licensed would not, individually or in the aggregate, have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole. 3.3 Charter and Bylaws. Except as disclosed on Schedule 3.3, the Company has made available to Buyer accurate and complete copies of (i) the charter and bylaws of each of the Company and the Subsidiaries as currently in effect, (ii) the stock records of each of the Company and the Subsidiaries, and (iii) the minutes of all meetings of the respective Boards of Directors of the Company and the Subsidiaries, any committees of such Boards, and the shareholders of the Company and the Subsidiaries (and all consents in lieu of such meetings). Such records, minutes and consents accurately reflect the stock ownership of the Company and the Subsidiaries and all actions taken by such Boards of Directors, committees and shareholders. Neither the Company nor any Subsidiary is in violation of any provision of its charter or bylaws, other than violations which, individually or in the aggregate, do not and will not have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole. 3.4 Capitalization of the Company. The authorized capital stock of the Company consists of 2,000,000 shares of Common Stock, no par value, of which, 5,180 shares are outstanding and 6,791 shares are held in the Company's treasury. All outstanding shares of capital stock of the Company have been validly issued and are fully paid and nonassessable, and no shares of capital stock of the Company are subject to, nor have any been issued in violation of, preemptive or similar rights. All issuances, sales and repurchases by the Company of shares of its capital stock have been effected in compliance with all Applicable Laws, including without limitation applicable federal and state securities laws. The Shares constitute (and at the Closing will constitute) all the outstanding shares of capital stock of the Company. As of the date hereof, an aggregate of 830 shares of Common Stock of the Company are reserved for issuance and issuable upon the exercise of outstanding employee stock options (the "Outstanding Options") granted under the Company's stock option plan to a total of five persons (the "Option Holders") at exercise prices ranging from $1,147.58 to $2,545.00 per share. Except as set forth above in this Section, there are (and as of the Closing Date there will be) outstanding (i) no shares of 6 13 capital stock or other voting securities of the Company, (ii) no securities of the Company convertible into or exchangeable for shares of capital stock or other voting securities of the Company, (iii) no options or other rights to acquire from the Company, and no obligation of the Company to issue or sell, any shares of capital stock or other voting securities of the Company or any securities of the Company convertible into or exchangeable for such capital stock or voting securities, and (iv) no equity equivalents, interests in the ownership or earnings, or other similar rights of or with respect to the Company. As of the Closing Date there will be (and, except as disclosed on Schedule 3.4, there are) no outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any of the foregoing shares, securities, options, equity equivalents, interests or rights. 3.5 Authority Relative to This Agreement. (a) The Company has full corporate power and corporate authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Company of this Agreement, and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action of the Company. This Agreement has been duly executed and delivered by the Company and constitutes, and each other agreement, instrument or document executed or to be executed by the Company in connection with the transactions contemplated hereby has been, or when executed will be, duly executed and delivered by the Company and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of the Company, enforceable against the Company in accordance with their respective terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights generally, (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances and (iii) public policy considerations with respect to the enforceability of rights of indemnification. (b) Each Seller has full legal right, power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by each Seller and constitutes, and each other agreement, instrument or document executed or to be executed by a Seller in connection with the transactions contemplated hereby has been, or when executed will be, duly executed and delivered by such Seller and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of such Seller, enforceable against such Seller in accordance with their respective terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights generally, (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances and (iii) public policy considerations with respect to the enforceability of rights of indemnification. 3.6 Noncontravention. (a) Except as disclosed on Schedule 3.6(a), the execution, delivery and performance by Sellers and the Company of this Agreement and the consummation by them of the transactions contemplated hereby do not and will not (i) conflict with or result in a violation of any provision of the charter or bylaws of the Company or any Subsidiary, (ii) conflict with or result in a violation of any provision of, or constitute (with or without the giving of notice or the passage of time or both) a default under, or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancellation or acceleration under, any bond, debenture, note, mortgage, indenture, lease, contract, agreement or other instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective properties may be bound, other 7 14 than conflicts, violations or defaults which, individually or in the aggregate, do not and will not have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole, (iii) result in the creation or imposition of any Encumbrance upon the properties of the Company or any Subsidiary, or (iv) assuming compliance with the matters referred to in Section 3.7, violate any Applicable Law binding upon the Company or any Subsidiary. (b) Except as disclosed on Schedule 3.6(b), the execution, delivery and performance by each Seller of this Agreement and the consummation by each Seller of the transactions contemplated hereby do not and will not (i) conflict with or result in a violation of any provision of, or constitute (with or without the giving of notice or the passage of time or both) a default under, or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancellation or acceleration under, any contract, agreement, instrument or obligation to which such Seller is a party or by which such Seller or any of such Seller's properties may be bound, (ii) result in the creation or imposition of any Encumbrance upon the properties of such Seller, or (iii) assuming compliance with the matters referred to in Section 3.7, violate any Applicable Law binding upon such Seller. 3.7 Governmental Approvals. No consent, approval, order or authorization of, or declaration, filing or registration with, any Governmental Entity is required to be obtained or made by any Seller or the Company or any Subsidiary in connection with the execution, delivery or performance by Sellers and the Company of this Agreement or the consummation by them of the transactions contemplated hereby, other than (i) compliance with any applicable requirements of the HSR Act; (ii) compliance with any applicable requirements of the Securities Act; (iii) compliance with any applicable requirements of the Exchange Act; (iv) compliance with any applicable state securities laws; (v) as set forth on Schedule 3.7; (vi) filings with Governmental Entities to occur in the ordinary course following the consummation of the transactions contemplated hereby; and (vii) such consents, approvals, orders or authorizations which, if not obtained, and such declarations, filings or registrations which, if not made, would not, individually or in the aggregate, have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole or on the ability of a Seller or the Company to consummate the transactions contemplated hereby. The representations and warranties of Sellers and the Company contained in this Section, insofar as such representations and warranties pertain to compliance by the Company with the requirements of the Securities Act and applicable state securities laws, are based on the representations and warranties of Buyer contained in Section 4.11. 3.8 Legal Proceedings. Except as disclosed on Schedule 3.8, there are no Proceedings pending or, to the best knowledge of Sellers and the Company, threatened against or involving the Company or any Subsidiary (or any of their respective directors or officers in connection with the business or affairs of the Company or any Subsidiary) or any properties or rights of the Company or any Subsidiary. Except as disclosed on Schedule 3.8, Sellers and the Company reasonably believe any and all potential liability of the Company and the Subsidiaries under such Proceedings is adequately covered (except for deductible amounts as stated in the policies) by the existing insurance maintained by the Company and the Subsidiaries described in Section 3.9. No judgment, order, writ, injunction or decree of any Governmental Entity has been issued or entered against the Company or any Subsidiary which continues to be in effect. Neither the Company nor any Subsidiary is subject to any judgment, order, writ, injunction, or decree of any Governmental Entity which is reasonably likely to have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole. There are no Proceedings pending or, to the best knowledge of Sellers and the Company, threatened seeking to restrain, prohibit or obtain damages or other relief in connection with this Agreement or the transactions contemplated hereby. 8 15 3.9 Insurance. (a) The Company and the Subsidiaries maintain with sound and reputable insurers, and there are currently in full force and effect, policies of insurance with respect to their respective assets and operations, which policies of insurance are listed on Schedule 3.9(a). (b) Schedule 3.9(b) is a complete and accurate list of all pending or outstanding insurance claims ("Outstanding Insurance Claims") of the Company or any Subsidiary against the Company's insurance companies and the amount, if any, of each Outstanding Insurance Claim that is reflected in the Audited 1993 Financial Statements as an account receivable or other asset. 3.10 Subsidiaries. (a) The Company does not own, directly or indirectly, any capital stock or other equity securities of any corporation or have any direct or indirect equity or ownership interest in any other person, other than the Subsidiaries. Schedule 3.10 lists each Subsidiary, the jurisdiction of incorporation or formation of each Subsidiary and the authorized (in the case of capital stock) and outstanding capital stock or other equity interests of each Subsidiary. Each Corporate Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and each Partnership Subsidiary is a limited partnership or an Asociacion en Participacion duly formed and validly existing under the laws of the jurisdiction of its formation. Each Subsidiary has all requisite corporate or, in the case of a Partnership Subsidiary, partnership power and corporate or, in the case of a Partnership Subsidiary, partnership authority to own, lease and operate its properties and to carry on its business as now being conducted. Except as disclosed on Schedule 3.10, no actions or proceedings to dissolve any Subsidiary are pending. (b) Except as otherwise indicated on Schedule 3.10, all the outstanding capital stock or other equity interests of each Subsidiary are owned directly or indirectly by the Company, free and clear of all Encumbrances. All outstanding shares of capital stock of each Corporate Subsidiary have been validly issued and are fully paid and nonassessable. All partnership interests of each Partnership Subsidiary have been validly issued and are fully paid (to the extent required at such time). No shares of capital stock or other equity interests of any Subsidiary are subject to, nor have any been issued in violation of, preemptive or similar rights. Except as otherwise indicated on Schedule 3.10, all the assets and properties of the Company and each Subsidiary are owned free and clear of any Encumbrances, other than (i) liens for ad valorem taxes not yet due and payable; (ii) encumbrances (other than liens securing indebtedness) that do not affect the fair market value of the underlying asset; (iii) encumbrances (other than liens securing indebtedness) that do not and will not materially impair the use of the underlying asset as it is being used by the Company as of the Closing Date or for any other similar use; or (iv) materialman's, mechanic's, repairman's, employee's, contractor's, operator's or other similar liens, encumbrances or charges arising in the ordinary course of business incidental to construction, maintenance or operation of the Company's assets, securing obligations not yet due. (c) Except as set forth on Schedule 3.10, there are (and as of the Closing Date there will be) outstanding (i) no shares of capital stock or other voting securities of any Subsidiary, (ii) no securities of the Company or any Subsidiary convertible into or exchangeable for shares of capital stock or other voting securities of any Subsidiary, (iii) no options or other rights to acquire from the Company or any Subsidiary, and no obligation of the Company or any Subsidiary to issue or sell, any shares of capital stock or other voting securities of any Subsidiary or any securities convertible into or exchangeable for such capital stock or voting securities, and (iv) no equity equivalents, interests in the ownership or earnings, or other similar rights of or with respect to any Subsidiary. As of the Closing 9 16 Date there will be (and, except as disclosed on Schedule 3.10, there are) no outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any of the foregoing shares, securities, options, equity equivalents, interests or rights (except as contemplated in this Agreement). 3.11 Shares. Each Seller is (and at the Closing will be) the record and beneficial owner of, and upon consummation of the transactions contemplated hereby Buyer will acquire, good and valid title to, the number of Shares set forth opposite the name of such Seller on Annex I, free and clear of all Encumbrances, other than (i) those that may arise by virtue of any actions taken by or on behalf of Buyer or its affiliates or (ii) restrictions on transfer that may be imposed by federal or state securities laws. 3.12 Investment Representations. (a) Each Seller is acquiring the Buyer Shares and any Additional Shares (collectively, the "Transaction Securities") for his own account for investment and not with a view to, or for sale or other disposition in connection with, any distribution of all or any part thereof, except (i) in an offering covered by a registration statement filed with the Securities and Exchange Commission under the Securities Act covering the Buyer Shares or (ii) pursuant to an applicable exemption under the Securities Act. In acquiring the Transaction Securities, each Seller is not offering or selling, and will not offer or sell, for Buyer in connection with any distribution of the Transaction Securities and each Seller does not have a participation and will not participate in any such undertaking or in any underwriting of such an undertaking except in compliance with applicable federal and state securities laws. (b) Each Seller acknowledges that he or his representatives have been furnished with substantially the same kind of information regarding Buyer and its business, assets, results of operations and financial condition as would be contained in a registration statement prepared in connection with a public sale of the Buyer Shares. Each Seller further represents that he has had an opportunity to ask questions of and receive answers from Buyer regarding Buyer and its business, assets, results of operations and financial condition and the terms and conditions of the issuance of the Transaction Securities. The foregoing, however, shall not limit or modify the representations and warranties of Buyer in Article IV, shall not limit the rights of a Seller prior to and in anticipation of any issuance of the Transaction Securities pursuant hereto, and shall not limit the disclosure requirements of applicable federal and state securities laws. (c) Each Seller acknowledges that he is able to fend for himself, can bear the economic risk of his investment in the Transaction Securities, and has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Transaction Securities. (d) Each Seller understands that the Transaction Securities, when issued to such Seller, will not have been registered pursuant to the Securities Act or any applicable state securities laws, that the Transaction Securities will be characterized as "restricted securities" under federal securities laws, and that under such laws and applicable regulations the Transaction Securities cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom. In this connection, each Seller represents that he is familiar with Rule 144 promulgated under the Securities Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act. Stop transfer instructions may be issued to the transfer agent for securities of Buyer in connection with the Transaction Securities. 10 17 (e) It is agreed and understood by each Seller that the certificates representing the Transaction Securities shall each conspicuously set forth on the face or back thereof, in addition to any legends required by Applicable Law or other agreement, a legend in substantially the following form: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE FIRST REGISTERED PURSUANT TO THAT ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE CORPORATION RECEIVES A WRITTEN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL ARE REASONABLY SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. It is agreed and understood by Buyer that the legends will be removed upon the registration of the shares represented by any such certificate under the Securities Act or upon delivery to Buyer of a written opinion of counsel, which opinion and counsel are reasonably satisfactory to Buyer, to the effect that such legend is not required. 3.13 Financial Statements. The Company has delivered to Buyer accurate and complete copies of (i) the Company's audited consolidated balance sheets as of December 31, 1992 and 1993, and the related audited consolidated statements of income, stockholders' equity and cash flows for each of the years then ended, and the notes and schedules thereto, prepared in conformity with generally accepted accounting principles, together with the unqualified reports thereon of KPMG Peat Marwick, independent public accountants (the "Audited Financial Statements"), (ii) the Company's unaudited consolidated balance sheet as of February 28, 1994 (the "Latest Balance Sheet"), statements of income, stockholders' equity and cash flows for the two-month period then ended (together with the unaudited financial statements referred to in clause (iii) below, the "Unaudited Financial Statements"), certified by the Company's controller, and (iii) the unaudited balance sheets as of February 28, 1994, together with statements of income, stockholders' equity and cash flows for the two-month period then ended, of the Company's unconsolidated Subsidiaries, certified by the Company's controller (collectively, the "Financial Statements"). The Financial Statements (x) represent actual bona fide transactions, (y) have been prepared from the respective books and records of the Company and its consolidated and unconsolidated Subsidiaries, as the case may be, in conformity with generally accepted accounting principles applied on a basis consistent with preceding years throughout the periods involved, except that the Unaudited Financial Statements are not accompanied by notes or other textual disclosure required by generally accepted accounting principles, and except that the Financial Statements prepared as at and for the year ended December 31, 1993 (the "Audited 1993 Financial Statements") shall be presented in a manner consistent with the current text of all published statements issued by the Financial Accounting Standards Board, including Numbers 106 and 112 ("FASB Standards"), as at December 31, 1993 and (z) accurately, completely and fairly present in all material respects the Company's consolidated financial position as of the respective dates thereof and its consolidated results of operations and cash flows for the periods then ended, except that the Unaudited Financial Statements are subject to normal year-end adjustments, which will not be material in the aggregate. With respect to clause (y) immediately preceding, the FASB Standards whose implementation was not mandatory for financial years ended prior to January 1, 1994 shall, nevertheless, be effected on or before March 31, 1994. Implementation of all FASB Standards as of December 31, 1993, rather than on or before March 31, 1994, would not have caused a material adverse effect on the financial condition of the Company as reflected in the Audited 1993 Financial Statements. 11 18 3.14 Absence of Undisclosed Liabilities. Neither the Company nor any Subsidiary has any liability or obligation (whether accrued, absolute, contingent, unliquidated or otherwise, whether or not known to the Company or any Subsidiary, and whether due or to become due), except (i) liabilities reflected on the Latest Balance Sheet, (ii) liabilities which have arisen since the date of the Latest Balance Sheet in the ordinary course of business (none of which is a material liability for breach of contract, breach of warranty, tort or infringement), (iii) liabilities arising under executory contracts entered into in the ordinary course of business (none of which is a material liability for breach of contract), (iv) liabilities specifically set forth on Schedule 3.14, and (v) other liabilities which, in the aggregate, are not material to the Company and the Subsidiaries considered as a whole. 3.15 Absence of Certain Changes. Except as disclosed on Schedule 3.15, since December 31, 1993, (i) there has not been any material adverse change in the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole other than general economic conditions affecting the oil drilling industry; (ii) the businesses of the Company and the Subsidiaries have been conducted only in the ordinary course consistent with past practice; (iii) neither the Company nor any Subsidiary has incurred any material liability, engaged in any material transaction or entered into any material agreement outside the ordinary course of business consistent with past practice; (iv) neither the Company nor any Subsidiary has suffered any material loss, damage, destruction or other casualty to any of its assets (whether or not covered by insurance); and (v) neither the Company nor any Subsidiary has taken any of the actions set forth in Section 5.2 except as permitted thereunder. 3.16 Tax Matters. Except as disclosed on Schedule 3.16: (a) The Company and each Subsidiary have (and as of the Closing Date will have) duly filed all federal, state, local and foreign Tax Returns due (after taking into account any extensions) on or before the Closing Date and required to be filed by or with respect to them with the IRS or other applicable taxing authority, and, except for tax years ending after December 31, 1992, no extensions with respect to such Tax Returns have (or as of the Closing Date will have) been requested or granted; (b) the Company and each Subsidiary have (and as of the Closing Date will have) paid, or adequately reserved against in the Financial Statements, all Taxes due (and Taxes for 1993 and for the period in 1994 through the Closing Date, whether then due or not), or claimed by any taxing authority to be due, from or with respect to them, except Taxes that are being contested in good faith by appropriate legal or administrative proceedings and for which adequate reserves have been set aside as disclosed on Schedule 3.16; (c) there has been no adjustment proposed by the IRS or any other taxing authority in connection with any of the Tax Returns filed by the Company and each Subsidiary prior to the Closing; (d) the Company and each Subsidiary have (and as of the Closing Date will have) made all deposits (including estimated tax payments for taxable years for which the consolidated federal income tax return of the Company is not yet due) required with respect to Taxes; (e) the federal income Tax Return of the Company and the Subsidiaries (other than 1201 Dairy Ashford Ltd.) has been audited by the IRS for the taxable year ended December 31, 1990 and such audit proceedings have been closed (or the applicable statutes of limitations have expired) and all adjustments settled. The IRS has not audited the federal income tax returns of the Company and the Subsidiaries for any other taxable year within the last ten years; 12 19 (f) the United Kingdom income Tax Returns of the Company and the Subsidiaries have been audited by the applicable taxing authority for the taxable year ended December 31, 1992 and the audit proceedings have been closed and all adjustments settled. No other local, state or foreign income Tax Returns of the Company and the Subsidiaries have been audited; (g) no waiver or extension of any statute of limitations as to any federal, state, local or foreign Tax matter has been given by or requested from the Company or any Subsidiary; (h) neither the Company nor any Subsidiary has entered into any closing agreement (within the meaning of Section 7121 of the Code or any analogous provision of state or local Tax law) which will have any continuing effect after the Closing Date; (i) the Company has not filed a consent under Section 341(f) of the Code; (j) except for statutory liens for current Taxes not yet due and liens for ad valorem Taxes due for 1994, no liens for Taxes exist upon the assets of either the Company or the Subsidiaries; (k) neither the Company nor any of the Subsidiaries has filed consolidated income Tax Returns with any corporation, other than consolidated federal and state income Tax Returns with the Company and the Subsidiaries, for any taxable period which is not now closed by the applicable statute of limitations; (l) neither Seller is a person other than a United States person within the meaning of the Code; and (m) neither the Company nor any of the Subsidiaries has any gain on any deferred intercompany transaction as defined in Treasury Regulation Section 1.1502-13. 3.17 Compliance With Laws. The Company and the Subsidiaries have complied in all material respects with all Applicable Laws (including without limitation Applicable Laws relating to securities, properties, business products, manufacturing processes, advertising and sales practices, employment practices, terms and conditions of employment, wages and hours, safety, occupational safety, health, environmental protection, product safety and civil rights), except for noncompliance with such Applicable Laws which, individually or in the aggregate, does not and will not affect materially and adversely the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole. Neither Sellers, the Company nor any Subsidiary has received any written notice, which has not been dismissed or otherwise disposed of, that the Company or any Subsidiary has not so complied. Neither the Company nor any Subsidiary is charged or, to the best knowledge of Sellers and the Company, threatened with, or, to the best knowledge of Sellers and the Company, under investigation with respect to, any violation of any Applicable Law relating to any aspect of the business of the Company or any Subsidiary, other than violations which, individually or in the aggregate, do not and will not have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole. 3.18 Agreements. (a) Set forth on Schedule 3.18 is a list of all the following agreements, arrangements and understandings (written or oral, formal or informal) (collectively, for purposes of this Section, 13 20 "agreements") to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective properties is otherwise bound: (i) collective bargaining agreements and similar agreements with employees as a group; (ii) employee benefit agreements, trusts, plans, funds or other arrangements of any nature, including those referred to in Section 5.2(e)(i); (iii) agreements with any current or former shareholder, director, officer, employee, consultant or advisor or any affiliate of any such person; (iv) agreements between or among the Company and any of the Subsidiaries; (v) indentures, mortgages, security agreements, notes, loan or credit agreements, or other agreements relating to the borrowing of money by the Company or any Subsidiary or to the direct or indirect guarantee or assumption by the Company or any Subsidiary of any obligation of others, including any agreement that has the economic effect although not the legal form of any of the foregoing; (vi) agreements relating to the acquisition or disposition of assets, other than those entered into in the ordinary course of business consistent with past practice; (vii) agreements relating to the acquisition or disposition of any interest in any business enterprise; (viii) agreements with respect to the lease of real or personal property; (ix) agreements concerning the management or operation of any real property; (x) broker, distributor, dealer, manufacturer's representative, sales, agency, sales promotion, advertising, market research, marketing, consulting, research and development, maintenance, service and repair agreements; (xi) license, royalty or other agreements relating to Intellectual Property; (xii) partnership, joint venture and profit sharing agreements; (xiii) agreements with any Governmental Entity; (xiv) agreements relating to the Release or Disposal of Hazardous Substances or Solid Wastes; (xv) agreements in the nature of a settlement or a conciliation agreement arising out of any claim asserted by any other person; (xvi) agreements containing any covenant limiting the freedom of the Company or any Subsidiary to engage in any line of business or compete with any other person in any geographic area or during any period of time; 14 21 (xvii) agreements with any person who provides services to the Company or a Subsidiary as an independent contractor; (xviii) agreements not made in the ordinary course of business; and (xix) other agreements, whether or not made in the ordinary course of business, that are material to the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole. (b) The Company has delivered or made available to Buyer accurate and complete copies of the written agreements listed on Schedule 3.18. Each of the agreements listed on Schedule 3.18 is a valid and binding agreement of the Company and the Subsidiaries enforceable against them in accordance with its terms. Neither the Company nor any Subsidiary is in breach of or in default under, nor has any event occurred which (with or without the giving of notice or the passage of time or both) would constitute a default by the Company or any Subsidiary under, any of such agreements, except for any such default that would not materially and adversely affect the business, assets, results of operation or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole. Neither Seller, the Company nor any Subsidiary has received any notice from, or given any notice to, any other party indicating that the Company or any Subsidiary or such other party is in breach of or in default under any of such agreements. To the best knowledge of Sellers and the Company, no other party to any of such agreements is in breach of or in default under such agreements, nor has any assertion been made by any Seller or the Company or any Subsidiary of any such breach or default. 3.19 ERISA. (a) Set forth on Schedule 3.19 is a list identifying each "employee benefit plan", as defined in Section 3(3) of ERISA, (i) which is maintained, administered or contributed to by the Company or any affiliate of the Company, and (ii) which covers any employee or former employee of the Company or any affiliate of the Company or under which the Company or any affiliate of the Company has any liability. The Company has delivered to Buyer accurate and complete copies of such plans (and, if applicable, the related trust agreements) and all amendments thereto and written interpretations thereof, together with the three most recent annual reports (Form 5500 including, if applicable, Schedule B thereto) prepared in connection with any such plan. Such plans are referred to in this Section as the "Employee Plans". For purposes of this Section only, an "affiliate" of any person means any other person which, together with such person, would be treated as a single employer under Section 414 of the Code. The only Employee Plans which individually or collectively would constitute an "employee pension benefit plan" as defined in Section 3(2) of ERISA are identified as such on Schedule 3.19. (b) Except as otherwise identified on Schedule 3.19, (i) no Employee Plan constitutes a "multiemployer plan", as defined in Section 3(37) of ERISA (for purposes of this Section, a "Multiemployer Plan"), (ii) no Employee Plan is maintained in connection with any trust described in Section 501(c)(9) of the Code, (iii) no Employee Plan is a defined benefit plan, and (iv) during the past five years, neither the Company nor any of its affiliates have made or been required to make contributions to any Multiemployer Plan. Neither the Company nor any affiliate of the Company has incurred any material liability under Title IV of ERISA arising in connection with the termination of, or complete or partial withdrawal from, any plan covered or previously covered by Title IV of ERISA. The Company and all of the affiliates of the Company have paid and substantially discharged promptly when due all liabilities and obligations arising under ERISA or the Code of a character which if unpaid or unperformed might result in the imposition of a lien against any of the assets of the Company or any Subsidiary. Nothing done or omitted to be done and no transaction or holding of any asset under or 15 22 in connection with any Employee Plan has or will make the Company or any Subsidiary or any director or officer of the Company or any Subsidiary subject to any liability under Title I of ERISA or liable for any Tax pursuant to Section 4975 of the Code that could have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the Company and the Subsidiaries considered as a whole. There are no threatened or pending claims by or on behalf of the Employee Plans, or by any participant therein, alleging a breach or breaches of fiduciary duties or violations of Applicable Laws which could result in liability on the part of the Company, its officers or directors, or such Employee Plans, under ERISA or any other Applicable Law and, to the knowledge of Sellers, there is no basis for any such claim. (c) Each Employee Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and has been so qualified since the date of its adoption, and each trust forming a part thereof is exempt from Tax pursuant to Section 501(a) of the Code. Set forth on Schedule 3.19 is a list of the most recent IRS determination letters with respect to any such Plans, accurate and complete copies of which letters have been delivered to Buyer. Each Employee Plan has been maintained in substantial compliance with its terms and with the requirements prescribed by all Applicable Laws, including but not limited to ERISA and the Code, which are applicable to such Plans. (d) To the extent not listed on Schedule 3.18, there is set forth on Schedule 3.19 a list of each employment, severance or other similar contract, arrangement or policy and each plan or arrangement (written or oral) providing for insurance coverage (including any self-insured arrangements), workers' compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits that (i) is not an Employee Plan, (ii) is entered into, maintained or contributed to, as the case may be, by the Company or any affiliate of the Company, and (iii) covers any employee or former employee of the Company or any affiliate of the Company or under which the Company or any affiliate of the Company has any liability. Such contracts, plans and arrangements as are described in the preceding sentence are referred to for purposes of this Section as the "Benefit Arrangements". Each Benefit Arrangement has been maintained in substantial compliance with its terms and with the requirements prescribed by Applicable Laws. (e) Neither the Company nor any affiliate of the Company has performed any act or failed to perform any act, and there is no contract, agreement, plan or arrangement covering any employee or former employee of the Company or any affiliate of the Company, that, individually or collectively, could give rise to the payment of any amount that would not be deductible pursuant to the terms of Section 162(a)(1) or 280G of the Code, or could give rise to any penalty or excise Tax pursuant to Section 4980B or 4999 of the Code. (f) Except as disclosed on Schedule 3.19, there has been no amendment, written interpretation or announcement (whether or not written) by the Company or any affiliate of the Company of or relating to, or change in employee participation or coverage under, any Employee Plan or Benefit Arrangement which would increase materially the expense of maintaining such Employee Plan or Benefit Arrangement above the level of the expense incurred in respect thereof for the fiscal year ended December 31, 1993. (g) Neither the Company nor any of its affiliates provide employee post-retirement medical or health coverage or contribute to or maintain any employee welfare benefit plan that provides for health benefit coverage following termination of employment except as is required by Section 4980B(f) 16 23 of the Code, and neither the Company nor any of its affiliates have made any representations, agreements, covenants or commitments to provide any such coverage. 3.20 Environmental Matters. (a) Except as set forth on Schedule 3.20, neither the Company, any Subsidiary nor any property owned or leased by the Company or any Subsidiary (for purposes of this Section, the "Property") is in violation of, or subject to any pending or, to the best knowledge of Sellers and the Company, threatened Proceeding under, or subject to or could be subject to any remedial obligations (financial or otherwise) under, any Applicable Laws pertaining to the environment, Hazardous Substances or Solid Wastes (such Applicable Laws as they now exist or are hereafter enacted and/or amended are collectively, for purposes of this Section, called "Applicable Environmental Laws"), including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (as amended, for purposes of this Section, called "CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as amended, for purposes of this Section, called "RCRA"), the Texas Water Code and the Texas Solid Waste Disposal Act. No asbestos, material containing asbestos that is or may become friable, or material containing asbestos deemed hazardous by Applicable Laws, has been installed in any Property. The representations and warranties set forth in the preceding sentences of this Section would continue to be true and correct following disclosure to the applicable Governmental Entities of all relevant facts, conditions and circumstances, if any, pertaining to the Property. (b) Except as set forth on Schedule 3.20, the Company and the Subsidiaries have not obtained and are not required to obtain any Permits to construct, occupy, operate or use any buildings, improvements, fixtures, equipment or other tangible property forming a part of the Property by reason of any Applicable Environmental Laws. The Company and the Subsidiaries undertook, at the time of acquisition of the Property, all appropriate inquiry into the previous ownership and uses of the Property consistent with good commercial or customary practice at the time of such acquisition. The Company and the Subsidiaries have obtained a Phase I environmental study of the corporate and manufacturing facilities in Houston. To the knowledge of Sellers, no Hazardous Substances or Solid Wastes have been Disposed of or otherwise Released on or to the Property. (c) The terms "Hazardous Substance" and "Release" shall have the meanings specified in CERCLA, and the terms "Solid Waste" and "Disposal" (or "Disposed") shall have the meanings specified in RCRA; provided that in the event either CERCLA or RCRA is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment; and provided further, that to the extent the laws of the jurisdiction in which the Property is located establish a meaning for "Hazardous Substance", "Release", "Solid Waste" or "Disposal" (or "Disposed") which is broader than that specified in either CERCLA or RCRA, such broader meaning shall apply. 3.21 Labor Relations. (a) Except as disclosed on Schedule 3.21, (i) there are no collective bargaining agreements or other similar agreements, arrangements or understandings, written or oral, with employees as a group to or by which the Company or any Subsidiary is a party or is bound; (ii) no employees of the Company or any Subsidiary are represented by any labor organization, collective bargaining representative or group of employees; (iii) no labor organization, collective bargaining representative 17 24 or group of employees claims to represent a majority of the employees of the Company or any Subsidiary in an appropriate unit of the Company or any Subsidiary; (iv) neither the Company nor any Subsidiary has been involved with any representational campaign by any union or other organization or group seeking to become the collective bargaining representative of any of its employees or been subject to or, to the best knowledge of Sellers and the Company, threatened with any strike or other concerted labor activity or dispute; and (v) neither the Company nor any Subsidiary is obligated to bargain collectively with respect to wages, hours and other terms and conditions of employment with any recognized or certified labor organization, collective bargaining representative or group of employees. (b) Except as disclosed on Schedule 3.21, the Company and the Subsidiaries are in compliance in all material respects with all Applicable Laws pertaining to employment and employment practices and wages, hours and other terms and conditions of employment in respect of their respective employees and independent contractors and are not engaged in any unfair labor practices or unlawful employment practices. There is no pending or, to the best knowledge of Sellers and the Company, threatened Proceeding by or before, and neither the Company nor any Subsidiary is subject to any judgment, order, writ, injunction or decree of or inquiry from, the National Labor Relations Board, the Equal Employment Opportunity Commission, the Department of Labor or any other Governmental Entity in connection with any current, former or prospective employee or independent contractor of the Company or any Subsidiary. 3.22 Employees. (a) Set forth on Schedule 3.22 is a list of all directors and officers of the Company and the Subsidiaries. (b) The Company has delivered to Buyer a schedule setting forth the name, social security number and dates of employment by the Company or a Subsidiary of each employee, agent or consultant of the Company or any Subsidiary as of February 28, 1994, together with the total amounts of salary, bonuses and other compensation paid or payable by the Company or any Subsidiary to each such person for the current fiscal year and the immediately preceding fiscal year. (c) The consummation of the transactions contemplated by this Agreement will not result in the incurring of any severance pay obligations to any person employed by the Company or any Subsidiary. Except as set forth on Schedule 3.22, no Seller and no affiliate of any Seller has entered into any type of employment or consulting agreement, written or oral, with any employee of the Company or any Subsidiary, nor has any Seller or any affiliate of any Seller engaged in discussions with any such employee relating thereto. 3.23 Employee Confidentiality Agreements. All current employees of the Company and the Subsidiaries who have or who have had reasonable access to any secret, confidential or proprietary information relating to the Company or any Subsidiary or its business have executed written confidentiality agreements with the Company or a Subsidiary pursuant to which such employees have agreed to maintain in confidence secret, confidential or proprietary information learned or acquired in the scope of their employment. 3.24 Insider Interests. Except as disclosed on Schedule 3.24, no shareholder, director or officer of the Company or any Subsidiary or any associate of any such shareholder, director or officer is currently, directly or indirectly, a party to any transaction with the Company or any Subsidiary, including, without limitation, any agreement, arrangement or understanding, written or oral, providing 18 25 for the employment of, furnishing of services by, rental of real or personal property from, or otherwise requiring payments to any such shareholder, director, officer or associate. To the best knowledge of Sellers and the Company (without inquiry), no shareholder, director or officer of the Company or any Subsidiary or any associate of any such shareholder, director or officer owns, directly or indirectly, any interest in, or serves as a director, officer, or employee of, any customer, supplier or competitor of the Company or any Subsidiary. For purposes of this Section only, an "associate" of any shareholder, director or officer means any member of the immediate family of such shareholder, director or officer or any corporation, partnership, trust or other entity in which such shareholder, director, officer or employee has a substantial ownership or beneficial interest (other than an interest in a public corporation which does not exceed three percent of its outstanding securities) or is a director, officer, partner, or trustee or person holding a similar position. 3.25 Financial Requirements. Set forth on Schedule 3.25 is a list and brief description of all bonds, deposits, financial assurance requirements and insurance coverage required to be submitted to Governmental Entities for the continued ownership and operation of the business and assets of the Company and the Subsidiaries. 3.26 Bank Accounts and Powers of Attorney. Set forth on Schedule 3.26 are (i) the name and address of each bank or other financial institution in which the Company or any Subsidiary has an account or a safe deposit box, the account and safe deposit box numbers thereof, and the names of all persons authorized to draw thereon or to have access thereto, (ii) the names of all persons authorized to borrow funds on behalf of the Company or any Subsidiary and the names of all entities from which they are authorized to borrow funds, and (iii) the names of all persons, if any, holding powers of attorney from the Company or any Subsidiary. 3.27 Books and Records. All the books and records of the Company and the Subsidiaries, including all personnel files, employee data and other materials relating to employees, are substantially complete and correct in all material respects, have been in all material respects maintained in accordance with good business practice and all Applicable Laws, and, in the case of the books of account, have been in all material respects prepared and maintained in accordance with generally accepted accounting principles consistently applied. Such books and records accurately and fairly reflect, in reasonable detail, all material transactions, assets and liabilities of the Company and the Subsidiaries. 3.28 Illegal Payments. To the best knowledge of Sellers and the Company, none of the Company or any Subsidiary or any director, officer, employee or agent of the Company or any Subsidiary has, directly or indirectly, paid or delivered any fee, commission or other sum of money or item of property however characterized to any broker, finder, agent, government official or other person, in the United States or any other country, in any manner related to the business or operations of the Company or any Subsidiary, which the Company or any Subsidiary or any such director, officer, employee or agent knows to have been, or has reason to believe was, illegal under any Applicable Law. 3.29 Offerings of Securities. All securities that have been offered or sold by the Company were offered and sold pursuant to valid exemptions from registration. No prospectus, private offering memorandum or other information furnished (whether in writing or orally) to any offeree or purchaser of such securities, at the time of delivery of such prospectus, private offering memorandum or other information, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. 19 26 3.30 Brokerage Fees. Neither Sellers nor any of their affiliates has retained any financial advisor, broker, agent or finder or paid or agreed to pay any financial advisor, broker, agent or finder on account of this Agreement or any transaction contemplated hereby except that Simmons & Company International ("Simmons") has been retained as the financial advisor of the Company in connection with the transactions contemplated hereby pursuant to the letter agreement between the Company and Simmons dated September 23, 1991, an accurate and complete copy of which has been delivered to Buyer. Beall shall indemnify and hold harmless the Company and Buyer from and against any and all losses, claims, damages and liabilities (including legal and other expenses reasonably incurred in connection with investigating or defending any claims or actions) with respect to any finder's fee, brokerage commission or similar payment in connection with any transaction contemplated hereby asserted by any person on the basis of any act or statement made or alleged to have been made by any Seller or any of such Seller's affiliates. 3.31 Disclosure. No representation or warranty made by Sellers or the Company in this Agreement, and no statement of any Seller, the Company or their representatives contained in any document, certificate or other writing furnished or to be furnished by Sellers or the Company pursuant hereto or in connection herewith, contains or will contain, at the time of delivery, any untrue statement of a material fact or omits or will omit, at the time of delivery, to state any material fact (other than those facts generally recognized to be industry risks normally associated with the contract drilling and consulting engineering services businesses) necessary in order to make the statements contained therein, in light of the circumstances under which they are made, not misleading. 3.32 Representations and Warranties on Closing Date. The representations and warranties made in this Article III will be true and correct in all material respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date, except that any such representations and warranties that expressly relate only to an earlier date shall be true and correct on the Closing Date as of such earlier date. 3.33 No Other Representations. Except as and to the extent set forth in this Article III, Sellers and the Company make no representations or warranties whatsoever to Buyer and hereby disclaim all liability and responsibility for any representation, warranty, statement or information made, communicated or furnished (orally or in writing) to Buyer or its representatives (including without limitation any opinion, information, projection or advice that may have been or may be provided to Buyer by any director, officer, employee, agent, consultant or representative of Sellers or the Company or any affiliate thereof). ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents and warrants to Sellers that: 4.1 Corporate Organization. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and corporate authority to own, lease and operate its properties and to carry on its business as now being conducted. 4.2 Qualification. Buyer is duly qualified or licensed to do business and is in good standing in each of the jurisdictions set forth on Schedule 4.2, which are all the jurisdictions in which the 20 27 property owned, leased or operated by it or the conduct of its business requires such qualification or licensing, except jurisdictions in which the failure to be so qualified or licensed would not, individually or in the aggregate, have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of Buyer. 4.3 Charter and Bylaws. Buyer has made available to Sellers or their representatives accurate and complete copies of the Certificate of Incorporation and Bylaws of Buyer as currently in effect. 4.4 Capitalization. The authorized capital stock of Buyer consists of 75,000,000 shares of Buyer Common Stock, of which, as of December 31, 1993, 47,548,339 shares were outstanding, and 15,000,000 shares of preferred stock, par value $1.00 per share, of which, as of December 31, 1993, 2,990,000 shares designated as $2.25 Convertible Exchangeable Preferred Stock (the "Convertible Preferred Stock") were outstanding. As of December 31, 1993, Buyer had an additional 250,000 issued shares of Buyer Common Stock held as treasury shares. All outstanding shares of capital stock of Buyer have been validly issued and are fully paid and nonassessable, and no shares of capital stock of Buyer are subject to, nor have any been issued in violation of, preemptive or similar rights. As of December 31, 1993, an aggregate of 18,466,488 shares of Buyer Common Stock were reserved for issuance and issuable pursuant to Buyer's Thrift Plan or upon the exercise of outstanding employee or non-employee director stock options granted under Buyer's stock option plans and agreements or the conversion of the Convertible Preferred Stock. Except as set forth above in this Section, as of December 31, 1993, there were outstanding (i) no shares of capital stock or other voting securities of Buyer, (ii) no securities of Buyer convertible into or exchangeable for shares of capital stock or other voting securities of Buyer, (iii) except for the obligations of Buyer pursuant to this Agreement, no options or other rights to acquire from Buyer, and no obligation of Buyer to issue or sell, any shares of capital stock or other voting securities of Buyer or any securities of Buyer convertible into or exchangeable for such capital stock or voting securities, and (iv) no equity equivalents, interests in the ownership or earnings, or other similar rights of or with respect to Buyer. There are no outstanding obligations of Buyer to repurchase, redeem or otherwise acquire any shares of its capital stock. 4.5 Authority Relative to This Agreement. Buyer has full corporate power and corporate authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement, and the consummation by it of the transactions contemplated hereby, have been duly authorized by all necessary corporate action of Buyer. This Agreement has been duly executed and delivered by Buyer and constitutes, and each other agreement, instrument or document executed or to be executed by Buyer in connection with the transactions contemplated hereby has been, or when executed will be, duly executed and delivered by Buyer and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with their respective terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights generally, (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances and (iii) public policy considerations with respect to the enforceability of rights of indemnification. 4.6 Noncontravention. Except as disclosed on Schedule 4.6(a), the execution, delivery and performance by Buyer of this Agreement and the consummation by it of the transactions contemplated hereby do not and will not (i) conflict with or result in a violation of any provision of the charter or bylaws of Buyer, (ii) conflict with or result in a violation of any provision of, or constitute (with or without the giving of notice or the passage of time or both) a default under, or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancellation or acceleration under, any bond, debenture, note, mortgage, indenture, lease, contract, agreement, or other 21 28 instrument or obligation to which Buyer is a party or by which Buyer or any of its properties may be bound, other than conflicts, violations or defaults which, individually or in the aggregate, do not and will not have a material adverse effect on the business, assets, results of operation or condition (financial or otherwise) of Buyer and its subsidiaries considered as a whole, (iii) result in the creation or imposition of any Encumbrance upon the properties of Buyer, or (iv) assuming compliance with the matters referred to in Section 4.7, violate any Applicable Law binding upon Buyer, except, in the case of clauses (ii), (iii) and (iv) above, for any such conflicts, violations, defaults, terminations, cancellations, accelerations or Encumbrances which would not, individually or in the aggregate, have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of Buyer and its subsidiaries considered as a whole or on the ability of Buyer to consummate the transactions contemplated hereby. 4.7 Governmental Approvals. No consent, approval, order or authorization of, or declaration, filing or registration with, any Governmental Entity is required to be obtained or made by Buyer in connection with the execution, delivery or performance by Buyer of this Agreement or the consummation by it of the transactions contemplated hereby, other than (i) compliance with any applicable requirements of the HSR Act; (ii) compliance with any applicable requirements of the Securities Act; (iii) compliance with any applicable requirements of the Exchange Act; (iv) compliance with any applicable state securities laws; (v) as set forth on Schedule 4.7; (vi) filings with Governmental Entities to occur in the ordinary course following the consummation of the transactions contemplated hereby; and (vii) such consents, approvals, orders or authorizations which, if not obtained, and such declarations, filings or registrations which, if not made, would not, individually or in the aggregate, have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of Buyer and its subsidiaries considered as a whole or on the ability of Buyer to consummate the transactions contemplated hereby. 4.8 Legal Proceedings. There are no Proceedings pending or, to the best knowledge of Buyer, threatened against or involving Buyer seeking to restrain, prohibit or obtain damages or other relief in connection with this Agreement or the transactions contemplated hereby. 4.9 Notes. The Notes to be issued by Buyer at the Closing have been duly authorized for such issuance and, when issued and delivered by Buyer in accordance with the provisions of this Agreement, will be validly issued and will constitute valid and legally binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, except that such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other laws relating to or affecting creditors' rights generally or by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 4.10 Transaction Securities. The Transaction Securities have been duly authorized for issuance and, if and when issued and delivered by Buyer in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable. The issuance of the Transaction Securities under this Agreement is not subject to any preemptive or similar rights. 4.11 Investment Intent. Buyer is acquiring the Shares for its own account for investment and not with a view to, or for sale or other disposition in connection with, any distribution of all or any part thereof, except in compliance with applicable federal and state securities laws. 4.12 SEC Filings. Buyer has heretofore delivered to Sellers accurate and complete copies of all reports, registration statements and other filings filed by Buyer with the Securities and Exchange Commission since January 1, 1993 (the "Buyer Commission Filings"). As of their respective dates, the 22 29 Buyer Commission Filings did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. The audited consolidated financial statements and unaudited consolidated interim financial statements of Buyer included in the Buyer Commission Filings present fairly, in conformity with generally accepted accounting principles applied on a consistent basis (except as may be indicated in the notes thereto), the consolidated financial position of Buyer as of the dates thereof and its consolidated results of operations and cash flows for the periods then ended (subject to normal year-end audit adjustments in the case of any unaudited interim financial statements). 4.13 Absence of Certain Changes. Except as disclosed on Schedule 4.13, since December 31, 1993, there has not been any material adverse change in the business, assets, results of operations or condition (financial or otherwise) of Buyer and its subsidiaries considered as a whole other than general economic conditions affecting the oil and gas drilling industry. 4.14 Brokerage Fees. Neither Buyer nor any of its affiliates has retained any financial advisor, broker, agent or finder or paid or agreed to pay any financial advisor, broker, agent or finder on account of this Agreement or any transaction contemplated hereby. Buyer shall indemnify and hold harmless Sellers from and against any and all losses, claims, damages and liabilities (including legal and other expenses reasonably incurred in connection with investigating or defending any claims or actions) with respect to any finder's fee, brokerage commission or similar payment in connection with any transaction contemplated hereby asserted by any person on the basis of any act or statement made or alleged to have been made by Buyer or any of its affiliates. 4.15 Disclosure. No representation or warranty made by Buyer in this Agreement, and no statement of Buyer contained in any document, certificate or other writing furnished or to be furnished by Buyer pursuant hereto or in connection herewith, contains or will contain, at the time of delivery, any untrue statement of a material fact or omits, or will omit, at the time of delivery, to state any material fact (other than those facts generally recognized to be industry risks normally associated with the contract drilling and production services businesses) necessary in order to make the statements contained therein, in the light of the circumstances under which they are made, not misleading. 4.16 Representations and Warranties on Closing Date. The representations and warranties made in this Article IV will be true and correct in all material respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date, except that any such representations and warranties that expressly relate only to an earlier date shall be true and correct on the Closing Date as of such earlier date. 4.17 No Other Representations. Except as and to the extent set forth in this Article IV, Buyer makes no representations or warranties whatsoever to Sellers and hereby disclaims all liability and responsibility for any representation, warranty, statement or information made, communicated or furnished (orally or in writing) to Sellers or their representatives (including without limitation any opinion, information, projection or advice that may have been or may be provided to Sellers by any director, officer, employee, agent, consultant or representative of Buyer or any affiliate thereof). ARTICLE V CONDUCT OF COMPANY PENDING CLOSING 23 30 Beall and the Company hereby covenant and agree with Buyer as follows: 5.1 Conduct and Preservation of Business. Except as contemplated by this Agreement, during the period from the date hereof to the Closing, the Company and the Subsidiaries (i) shall each conduct its operations according to its ordinary course of business consistent with past practice and in compliance with all Applicable Laws; (ii) shall each use its reasonable best efforts to preserve, maintain and protect its properties; and (iii) shall each use its reasonable best efforts to preserve intact its business organization, to keep available the services of its officers and employees, and to maintain existing relationships with licensors, licensees, suppliers, contractors, distributors, customers and others having business relationships with it. 5.2 Restrictions on Certain Actions. Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, prior to the Closing, neither the Company nor any Subsidiary shall, without the prior written consent of Buyer: (a) amend its charter or bylaws; (b) (i) issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any shares of its capital stock of any class or any other securities or equity equivalents; or (ii) amend in any material respect any of the terms of any such securities outstanding as of the date hereof; (c) (i) split, combine or reclassify any shares of its capital stock; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, or property or any combination thereof) in respect of its capital stock; (iii) repurchase, redeem or otherwise acquire any of its securities or any securities of any Subsidiary (except as contemplated in this Agreement); or (iv) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing a liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Subsidiary; (d) (i) except in the ordinary course of business consistent with past practice, create, incur, guarantee or assume any indebtedness for borrowed money or otherwise become liable or responsible for the obligations of any other person; (ii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries and customary loans or advances to employees in amounts not material to the maker of such loan or advance); (iii) pledge or otherwise encumber shares of capital stock of the Company or any Subsidiary; or (iv) except in the ordinary course of business consistent with past practice, mortgage or pledge any of its assets, tangible or intangible, or create or suffer to exist any lien thereupon; provided, however, that in no event shall the Company and the Subsidiaries (A) incur incremental indebtedness in excess of $10,000 in the aggregate or (B) incur incremental indebtedness which is not prepayable at any time without penalty or premium; (e) (i) enter into, adopt or (except as may be required by law) amend or terminate (except as contemplated in this Agreement) any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee; (ii) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company, increase in any manner the compensation or fringe benefits of any director, officer or 24 31 employee; or (iii) pay to any director, officer or employee any benefit not required by any employee benefit agreement, trust, plan, fund or other arrangement as in effect on the date hereof; (f) acquire, sell, lease, transfer or otherwise dispose of, directly or indirectly, any assets outside the ordinary course of business consistent with past practice or any assets that in the aggregate are material to the Company; (g) acquire (by merger, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof; (h) make any capital expenditure or expenditures which, individually, is in excess of $10,000 or, in the aggregate, are in excess of $30,000; (i) make any Tax election or settle or compromise any federal, state, local or foreign Tax liability material to the Company; (j) pay, discharge or satisfy any claims, liabilities or obligations (whether accrued, absolute, contingent, unliquidated or otherwise, and whether asserted or unasserted), other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice, or in accordance with their terms, of liabilities reflected or reserved against in the Audited 1993 Financial Statements or incurred since December 31, 1993 in the ordinary course of business consistent with past practice; provided, however, that in no event shall the Company or any Subsidiary repay any long-term indebtedness except to the extent required by the terms thereof; (k) enter into any lease, contract, agreement, commitment, arrangement or transaction outside the ordinary course of business consistent with past practice; (l) amend, modify or change any existing lease, contract or agreement, other than in the ordinary course of business consistent with past practice; (m) waive, release, grant or transfer any rights of value, other than in the ordinary course of business consistent with past practice; (n) lay off any of its employees; (o) change any of its banking or safe deposit arrangements; (p) change any of the accounting principles or practices used by it, except for any change required by reason of a concurrent change in generally accepted accounting principles and notice of which is given in writing by the Company to Buyer, and except as otherwise contemplated by this Agreement; (q) take any action which would or might make any of the representations or warranties of Sellers or the Company contained in this Agreement untrue or inaccurate as of any time from the date of this Agreement to the Closing or would or might result in any of the conditions set forth in this Agreement not being satisfied; or (r) authorize or propose, or agree in writing or otherwise to take, any of the actions described in this Section. 25 32 ARTICLE VI ADDITIONAL AGREEMENTS 6.1 Access to Information; Confidentiality. (a) Between the date hereof and the Closing, Sellers and the Company (i) shall give Buyer and its authorized representatives reasonable access to all employees, all plants, offices, warehouses, and other facilities, and all books and records, including work papers and other materials prepared by the Company's independent public accountants, of the Company and the Subsidiaries, (ii) shall permit Buyer and its authorized representatives to make such inspections as they may reasonably require to verify the accuracy of any representation or warranty contained in Article III, and (iii) shall cause the Company's officers and those of the Subsidiaries to furnish Buyer and its authorized representatives with such financial and operating data and other information with respect to the Company and the Subsidiaries as Buyer may from time to time reasonably request; provided, however, that no investigation pursuant to this Section shall affect any representation or warranty of Sellers or the Company contained in this Agreement or in any agreement, instrument or document delivered pursuant hereto or in connection herewith; and provided further that Sellers and the Company shall have the right to have a representative present at all times. Buyer shall hold in confidence all such information on the terms and subject to the conditions contained in the letter agreement dated December 6, 1993 between the Company and Buyer. (b) Each Seller acknowledges and agrees that irreparable damage would occur in the event any confidential information regarding the business, assets, results of operation or financial condition of the Company or any Subsidiary were disclosed to or utilized on behalf of any person which is in competition in any material respect with any line or lines of business of the Company or any Subsidiary. Accordingly, each Seller covenants and agrees that it will not, directly or indirectly, without the prior written consent of Buyer, use or disclose any of such confidential information (other than confidential information directly pertaining to 1201 Dairy Ashford Ltd. or 1201 Dairy Ashford, Inc.), except to authorized representatives of Buyer; provided, however, that confidential information shall not be deemed to include information which (i) was or becomes generally available to the public other than as a result of disclosure by any Seller or its affiliates or (ii) was or becomes available to such Seller on a nonconfidential basis from a source other than Buyer or the Company or any Subsidiary, provided that such source is not known by such Seller to be bound by a confidentiality agreement with respect to such confidential information. Notwithstanding the foregoing provisions of this paragraph, each Seller and its affiliates may disclose any confidential information to the extent that, in the opinion of counsel for such Seller, such person is legally compelled to do so, provided that, prior to making such disclosure, such person advises and consults with Buyer regarding such disclosure and provided further that such person discloses only that portion of such confidential information as is legally required. 6.2 Acquisition Proposals. None of Sellers, the Company, any Subsidiary, or any affiliate, director, officer, employee or representative of any of them shall, directly or indirectly, (i) solicit, initiate or knowingly encourage any Acquisition Proposal or (ii) engage in discussions or negotiations with any person that is considering making or has made an Acquisition Proposal. Sellers and the Company shall immediately cease and cause to be terminated any existing activities, discussions or negotiations with any persons conducted heretofore with respect to any Acquisition Proposal and shall promptly request each such person who has heretofore entered into a confidentiality agreement in connection with an Acquisition Proposal to return to Sellers and the Company all confidential information heretofore furnished to such person by or on behalf of any Seller or the Company. The term "Acquisition Proposal", as used herein, means any offer or proposal for, or any indication of 26 33 interest in, a merger or other business combination involving the Company or any Subsidiary or the acquisition of any equity interest in, or a substantial portion of the assets of, the Company or any Subsidiary, other than the transactions contemplated by this Agreement. 6.3 Third Party Consents. Sellers and the Company shall use their respective reasonable best efforts to obtain all consents, approvals, orders, authorizations and waivers of, and to effect all declarations, filings and registrations with, all third parties (including Governmental Entities) that are required to enable Sellers to transfer the Shares to Buyer as contemplated by this Agreement and to otherwise consummate the transactions contemplated hereby. Buyer shall use its reasonable best efforts to obtain all consents, approvals, orders, authorizations and waivers of, and to effect all declarations, filings and registrations with, all third parties (including Governmental Entities) that are required to enable Buyer to consummate the transactions contemplated hereby. 6.4 Reasonable Best Efforts. Each party hereto agrees that it will not voluntarily undertake any course of action inconsistent with the provisions or intent of this Agreement and will use its reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things reasonably necessary, proper or advisable under Applicable Laws to consummate the transactions contemplated by this Agreement. Each Seller shall cooperate with and assist Buyer and its authorized representatives in order to provide an efficient and orderly transfer of the control and management of the business of the Company and the Subsidiaries to Buyer and to avoid any undue interruption in the activities and operations of such business following the Closing. 6.5 HSR Act Notification. To the extent required by the HSR Act and not already performed, each of the parties hereto shall (i) file or cause to be filed, as promptly as practicable, with the Federal Trade Commission and the United States Department of Justice, all reports and other documents required to be filed by such party under the HSR Act concerning the transactions contemplated hereby and (ii) promptly comply with or cause to be complied with any requests by the Federal Trade Commission or the United States Department of Justice for additional information concerning such transactions, in each case so that the waiting period applicable to this Agreement and the transactions contemplated hereby under the HSR Act shall expire as soon as practicable after the execution and delivery of this Agreement. Each party hereto agrees to request, and to cooperate with the other party or parties in requesting, early termination of any applicable waiting period under the HSR Act. 6.6 Agreement Regarding Registration. Buyer and Sellers shall enter into a Registration Agreement (the "Registration Agreement") at (and subject to the occurrence of) the Closing in substantially the form set forth as Exhibit 6.6. 6.7 Employment Agreement. Beall and the Company shall enter into an employment agreement (the "Employment Agreement") at (and subject to the occurrence of) the Closing pursuant to which the Company shall agree to employ Beall as President of the Company for the period and on the terms set forth therein. The Employment Agreement shall be in substantially the form set forth as Exhibit 6.7. 6.8 Public Announcements. Except as may be required by Applicable Law or the National Association of Securities Dealers, Inc., neither Buyer, on the one hand, nor Sellers and the Company, on the other, shall issue any press release or otherwise make any public statement with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other party. 6.9 Company Employee Bonus Pool. Buyer agrees that it will consider, subject to the occurrence of the Closing, the authorization and approval of the payment by the Company of bonuses 27 34 to employees of the Company and the Subsidiaries based on their performance during the year ending December 31, 1994. 6.10 Notification of Certain Matters. Sellers and the Company shall give prompt notice to Buyer of (i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be likely to cause any representation or warranty contained in Article III to be untrue or inaccurate in any material respect at or prior to the Closing and (ii) any material failure of any Seller or the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such person hereunder. Buyer shall give prompt notice to Sellers of (i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be likely to cause any representation or warranty contained in Article IV to be untrue or inaccurate in any material respect at or prior to the Closing and (ii) any material failure of Buyer to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such person hereunder. The delivery of any notice pursuant to this Section shall not be deemed to (i) modify the representations or warranties hereunder of the party delivering such notice, (ii) modify the conditions set forth in Articles VII and VIII, or (iii) limit or otherwise affect the remedies available hereunder to the party receiving such notice; provided, however, that if the Closing shall occur, then all matters disclosed pursuant to this Section at or prior to the Closing shall be waived and no party shall be entitled to make a claim thereon pursuant to the terms of this Agreement. 6.11 Amendment of Schedules. Each party hereto agrees that, with respect to the representations and warranties of such party contained in this Agreement, such party shall have the continuing obligation until the Closing to supplement or amend promptly the Schedules hereto with respect to any matter hereafter arising or discovered which, if existing or known at the date of this Agreement, would have been required to be set forth or described in the Schedules. For all purposes of this Agreement, including without limitation for purposes of determining whether the conditions set forth in Sections 7.1 and 8.1 have been fulfilled, the Schedules hereto shall be deemed to include only that information contained therein on the date of this Agreement and shall be deemed to exclude all information contained in any supplement or amendment thereto; provided, however, that if the Closing shall occur, then all matters disclosed pursuant to any such supplement or amendment at or prior to the Closing shall be waived and no party shall be entitled to make a claim thereon pursuant to the terms of this Agreement. 6.12 Fees and Expenses. Buyer shall pay all fees and expenses incurred by it in connection with this Agreement and the transactions contemplated hereby. Sellers shall pay all fees and expenses incurred by them and the Company in connection with this Agreement and the transactions contemplated hereby, including without limitation the fees and expenses of one outside counsel to Sellers and the Company; provided that the Company shall bear the first $100,000 of such fees and expenses incurred by the Company and Sellers. Buyer acknowledges that the fees and expenses of the independent accountants that prepare the Audited 1993 Financial Statements shall be paid by the Company. In the event the transaction contemplated hereby is not closed for any reason, Buyer shall pay the additional fees and expenses incurred in connection with the acceleration of such audit so that it can be completed prior to the scheduled Closing. 6.13 Transfer Taxes. All sales and transfer Taxes and fees incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by Sellers, and Sellers shall file all necessary documentation with respect to, and make all payments of, such Taxes and fees on a timely basis. 28 35 6.14 Survival of Covenants. Except for any covenant or agreement which by its terms expressly terminates as of a specific date, the covenants and agreements of the parties hereto contained in this Agreement shall survive the Closing without contractual limitation. 6.15 Negotiation Regarding Outstanding Options. Beall agrees to use his reasonable best efforts to have negotiated, on or before five business days prior to the Closing Date, with the holders of the Outstanding Options the cancellation thereof (effective at and subject to the occurrence of the Closing). 6.16 Director and Officer Insurance and Indemnification. After the Closing Date, Buyer agrees to provide or cause the Company to provide, from time to time and for so long as the Company is a majority owned subsidiary of Buyer, for the directors, officers, employees and agents of the Company and the Subsidiaries, (i) corporate indemnification on terms and conditions at least as favorable as such indemnification is then being provided to the directors, officers, employees and agents of Buyer or any of its subsidiaries and (ii) director and officer liability insurance on terms and conditions at least as favorable as such insurance is then being provided to the directors, officers, employees and agents of any of the subsidiaries of Buyer. 6.17 Agreement Regarding Indemnification for Certain Rental Obligations. Beall, the Company, 1201 Dairy Ashford Ltd. and Buyer shall enter into a lease indemnity agreement (the "Lease Indemnity Agreement") at (and subject to the occurrence of) the Closing pursuant to which Beall shall agree to indemnify Buyer for certain amounts relating to the Company's obligations under the Office Building Lease Agreement (the "Office Lease") dated January 29, 1991 between the Company and 1201 Dairy Ashford Ltd. The Lease Indemnity Agreement shall be in substantially the form set forth as Exhibit 6.17. ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLERS The obligation of Sellers to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment on or prior to the Closing Date of each of the following conditions: 7.1 Representations and Warranties True. All the representations and warranties of Buyer contained in this Agreement, and in any agreement, instrument or document delivered pursuant hereto or in connection herewith on or prior to the Closing Date, shall be true and correct in all material respects on and as of the Closing Date as if made on and as of such date, except as affected by transactions contemplated or permitted by this Agreement and except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct in all material respects as of such specified date. 7.2 Covenants and Agreements Performed. Buyer shall have performed and complied with in all material respects all covenants and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date. 7.3 Certificate. Sellers shall have received a certificate executed on behalf of Buyer by the president or the vice president-finance of Buyer, dated the Closing Date, representing and certifying, in such detail as Sellers may reasonably request, that the conditions set forth in Sections 7.1 and 7.2 have been fulfilled and that Buyer is not in breach of any provision of this Agreement. 29 36 7.4 Opinion of Counsel. Sellers shall have received an opinion of Thompson & Knight, P.C., legal counsel to Buyer, dated the Closing Date, with respect to the matters set forth in Exhibit 7.4. In rendering such opinion, such counsel may rely as to factual matters upon certificates or other documents furnished by directors and officers of Buyer and by government officials and upon such other documents and data as such counsel deems appropriate as a basis for such opinion. To the extent the foregoing opinion concerns the laws of any jurisdiction other than Texas such counsel may rely upon the opinion of legal counsel admitted to practice in such other jurisdiction. 7.5 HSR Act. All waiting periods (and any extensions thereof) applicable to this Agreement and the transactions contemplated hereby under the HSR Act shall have expired or been terminated. 7.6 Legal Proceedings. No Proceeding shall, on the Closing Date, be pending or threatened seeking to restrain, prohibit or obtain damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby. 7.7 Consents. All consents and approvals of third parties (including Governmental Entities) required to be obtained by or on the part of the parties hereto or otherwise reasonably necessary for the consummation of the transactions contemplated hereby shall have been obtained, and all thereof shall be in full force and effect at the time of Closing. 7.8 Other Documents. Sellers shall have received the certificates, instruments and documents listed below: (a) The Note to be delivered to each Seller pursuant to Section 1.2, duly executed by Buyer. (b) A stock certificate or certificates in definitive form representing the Buyer Shares to be delivered to each Seller pursuant to Section 1.2, registered in the name of such Seller and duly executed by Buyer, or, in the case of Bruce, cash in lieu thereof as contemplated by Section 1.2. (c) A copy of the resolutions of the Board of Directors of Buyer authorizing the execution, delivery and performance by Buyer of this Agreement, certified by the secretary or an assistant secretary of Buyer. (d) A certificate from the Secretary of State of Delaware dated not more than five days prior to the Closing Date, as to the legal existence and good standing of Buyer under the laws of such state. (e) Such other certificates, instruments and documents as may be reasonably requested by Sellers prior to the Closing Date to carry out the intent and purposes of this Agreement. 7.9 Payment of Consideration. Sellers shall have received the consideration set forth in Section 1.2 to be paid at the Closing. 7.10 Registration Agreement. The Buyer and the Sellers shall have entered into the Registration Agreement substantially in the form of Exhibit 6.6. 7.11 1201 Dairy Ashford, Inc. The issued and outstanding shares of 1201 Dairy Ashford, Inc. shall have been distributed to Beall, and the debt of 1201 Dairy Ashford Ltd. to the Company shall have been forgiven, effective immediately prior to the Closing. 30 37 ARTICLE VIII CONDITIONS TO OBLIGATIONS OF BUYER The obligation of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment on or prior to the Closing Date of each of the following conditions: 8.1 Representations and Warranties True. All the representations and warranties of Sellers and the Company contained in this Agreement, and in any agreement, instrument or document delivered pursuant hereto or in connection herewith on or prior to the Closing Date, shall be true and correct in all material respects on and as of the Closing Date as if made on and as of such date, except as affected by transactions contemplated or permitted by this Agreement and except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct in all material respects as of such specified date. 8.2 Covenants and Agreements Performed. Sellers and the Company shall have performed and complied with in all material respects all covenants and agreements required by this Agreement to be performed or complied with by them on or prior to the Closing Date. 8.3 Certificate. Buyer shall have received a certificate executed by each Seller and on behalf of the Company by the president of the Company, dated the Closing Date, representing and certifying, in such detail as Buyer may reasonably request, that the conditions set forth in Sections 8.1 and 8.2 have been fulfilled and that Sellers and the Company are not in breach of any provision of this Agreement. 8.4 Opinion of Counsel. Buyer shall have received opinions of Charles R. Erickson, general counsel of the Company, and Sewell & Riggs, P.C., legal counsel to Sellers and the Company, dated the Closing Date, with respect to the matters set forth in Exhibit 8.4. In rendering such opinions, such counsel may rely as to factual matters upon certificates or other documents furnished by Sellers and directors and officers of the Company and by government officials and upon such other documents and data as such counsel deems appropriate as a basis for such opinion. To the extent the foregoing opinions concern the laws of any jurisdiction other than Texas such counsel may rely upon the opinion of legal counsel admitted to practice in such other jurisdiction. 8.5 HSR Act. All waiting periods (and any extensions thereof) applicable to this Agreement and the transactions contemplated hereby under the HSR Act shall have expired or been terminated. 8.6 Legal Proceedings. No Proceeding shall, on the Closing Date, be pending or threatened seeking to restrain, prohibit or obtain damages or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby. 8.7 Consents. All consents and approvals of third parties (including Governmental Entities) required to be obtained by or on the part of the parties hereto or otherwise reasonably necessary for the consummation of the transactions contemplated hereby shall have been obtained, and all thereof shall be in full force and effect at the time of Closing. 31 38 8.8 Other Documents. Buyer shall have received the certificates, instruments and documents listed below: (a) The stock certificates representing the Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank, and otherwise in form acceptable to Buyer for transfer on the books of the Company. (b) The minute books, stock records and corporate seal of each of the Company and the Subsidiaries, certified as complete and correct as of the Closing Date by the secretary or an assistant secretary of the Company. (c) All the Company's and the Subsidiaries' books and records, including without limitation minute books, corporate charter, bylaws, stock records, bank account records, accounting records, computer records and all contracts with third parties. (d) The written resignations of such directors and officers of the Company and the Subsidiaries, if any, as Buyer shall, at least two days prior to the Closing Date, specify in writing to the Company, such resignations to be effective concurrently with the Closing on the Closing Date. (e) A copy of the resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance by the Company of this Agreement, certified by the secretary or an assistant secretary of the Company. (f) Certificates from the Secretary of State of Texas and the Comptroller of Public Accounts of the State of Texas, each dated not more than five days prior to the Closing Date, as to the legal existence and good standing, respectively. (g) Certificates from the appropriate public officials of the jurisdictions of incorporation or formation of the Subsidiaries, each dated not more than five days prior to the Closing Date, as to the legal existence and good standing of the Subsidiaries under the laws of their respective jurisdictions of incorporation or formation. (h) Such other certificates, instruments and documents as may be reasonably requested by Buyer prior to the Closing Date to carry out the intent and purposes of this Agreement. 8.9 No Material Adverse Change. Since the date of this Agreement, there shall not have been any material adverse change in the business, assets, results of operations or condition (financial or otherwise) of the Company. 8.10 Employment Agreement. Beall shall have entered into the Employment Agreement. 8.11 Cancellation of Outstanding Options. The Outstanding Options shall have been duly cancelled by the parties thereto such that Buyer will acquire all the equity ownership in the Company at the Closing. 8.12 Lease Indemnity Agreement. The Company, Beall, 1201 Dairy Ashford Ltd. and Buyer shall have entered into the Lease Indemnity Agreement. 32 39 ARTICLE IX TERMINATION, AMENDMENT AND WAIVER 9.1 Termination. This Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing in the following manner: (a) by mutual written consent of Sellers and the Company, on the one hand, and Buyer, on the other; or (b) by Sellers, if, on the Closing Date, any of the conditions set forth in Article VII shall not have been satisfied and shall not have been waived by Sellers; (c) by Buyer, if, on the Closing Date, any of the conditions set forth in Article VIII shall not have been satisfied and shall not have been waived by Buyer; or (d) by either Sellers or Buyer if the Closing shall not have occurred on or before April 22, 1994, unless such failure to close shall be due to a breach of this Agreement by the party seeking to terminate this Agreement pursuant to this clause. 9.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 9.1 by Sellers and the Company, on the one hand, or Buyer, on the other, written notice thereof shall forthwith be given to the other party specifying the provision hereof pursuant to which such termination is made, and this Agreement shall become void and have no effect, except that the agreements contained in this Section and in Sections 6.1, 6.8 and 6.12 and in Article XII shall survive the termination hereof. Nothing contained in this Section shall relieve any party from liability for damages actually incurred as a result of any breach of this Agreement. 9.3 Amendment. This Agreement may not be amended except by an instrument in writing signed by or on behalf of all the parties hereto. 9.4 Waiver. Each of Sellers and the Company, on the one hand, and Buyer, on the other, may (i) waive any inaccuracies in the representations and warranties of the other contained herein or in any document, certificate or writing delivered pursuant hereto or (ii) waive compliance by the other with any of the other's agreements or fulfillment of any conditions to its own obligations contained herein. Any agreement on the part of a party hereto to any such waiver shall be valid only if set forth in an instrument in writing signed by or on behalf of such party. No failure or delay by a party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 9.5 DTPA Waiver. THE PARTIES HEREBY WAIVE THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT, CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63 INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED) OF THE TEXAS BUSINESS & COMMERCE CODE. To evidence their ability to grant such waiver, the parties hereby represent and warrant that each (a) is in the business of seeking or acquiring, by purchase or lease, goods or services for commercial or business use, (b) has assets of $5,000,000 or more in accordance with its most recent financial statement prepared in accordance with generally accepted accounting principles, (c) has knowledge and experience in financial and business matters that have 33 40 enabled it to evaluate the merits and risks of the transaction contemplated hereby and (d) is not in a significantly disparate bargaining position. 9.6 Exclusive Remedy for Breach. Following the Closing, the indemnities provided for in this Agreement, including, without limitation, Article XII (including, without limitation, the provisions of Section 12.4(a)), are the parties' sole and exclusive remedies for all inaccuracies of representations and warranties or breaches of covenants and agreements in this Agreement including, but not limited to, any independent common law or statutory rights or remedies that any indemnified party may have at any time, now or in the future. ARTICLE X TAX MATTERS 10.1 Liability for Taxes, Filing Returns. (a) Taxable Periods Ending on or Before the Closing Date. Beall shall be solely liable for all Taxes of the Company and the Subsidiaries due for all taxable years and periods ending on or before the Closing Date other than Taxes reserved on the Financial Statements or paid prior to the Closing Date by the Company or the Subsidiaries or by Beall or an affiliate thereof. Beall shall cause the Company and the Subsidiaries to be included, and Buyer shall cause the Company and the Subsidiaries to consent to join, in the consolidated federal income Tax Returns of the Affiliated Group of which the Company is a member for all taxable years and periods ending on or before the Closing Date. Buyer and Beall recognize that the Company and the consolidated Subsidiaries shall file a consolidated federal income Tax Return of the Affiliated Group of which the Company is a member for the short taxable year ending on the Closing Date. Buyer and Beall shall cooperate in causing to be prepared and duly filed all such consolidated federal income Tax Returns and all other Tax Returns required to be filed by or with respect to the Company and the Subsidiaries for all taxable years and periods ending on or before the Closing Date. The covenants and agreements of Beall under this Section 10.1(a) shall survive the Closing only until the Survival Date (as defined in Section 12.1). (b) Taxable Periods Commencing After the Closing Date. Buyer shall be solely liable for all Taxes of the Company and the Subsidiaries for all taxable years and periods commencing after the Closing Date. Buyer shall cause to be prepared and duly filed all Tax Returns of the Company and the Subsidiaries for taxable periods commencing after the Closing Date. Buyer shall pay all Taxes shown to be due on such Tax Returns for all periods covered by such Tax Returns. Buyer shall be liable for, and shall indemnify and hold harmless Sellers against, any and all Taxes for any taxable year or taxable period commencing after the Closing Date due or payable by the Company or the Subsidiaries. 10.2 No Section 338 Election. No election under Section 338 of the Code shall be made with respect to Buyer's purchase of the Company and the Subsidiaries. With regard to the purchase by Buyer of the Shares, Buyer shall make a protective carryover basis election in the time and manner prescribed in Section 338(g) of the Code and Treasury Regulation Section 1.338-4T(f)(6), and any similar state law elections in all applicable states. Sellers recognize that Buyer plans to file a protective carryover basis election. 10.3 Contests. Whenever any taxing authority raises a claim, assessment or other dispute concerning an amount of Taxes for which the Company or the Subsidiaries may be liable, Buyer shall have the right to control any resulting proceedings and to determine whether and when to settle any 34 41 such claim, assessment or dispute; provided, however, that if Beall shall have any potential indemnification obligation to Buyer, then the provisions of Article XII (including, without limitation, Sections 12.2(c) and 12.4) shall control. ARTICLE XI RESTRICTIONS ON SALES, OTHER DISPOSITIONS 11.1 Restrictions on Sales, Other Dispositions. Each Seller agrees that such Seller will not, directly or indirectly, sell, assign, transfer, pledge, encumber or otherwise dispose of ("transfer") any of the Buyer Shares prior to the date that is six months after the Closing Date. Thereafter, each Seller shall have the right to transfer, on a cumulative basis, up to (i) one-third of the Buyer Shares received by such Seller at the Closing at any time prior to the first anniversary of the Closing Date and (ii) an additional one-third of the Buyer Shares received by such Seller at the Closing at any time on or after the first anniversary of the Closing Date and prior to the second anniversary of the Closing Date. On or after the second anniversary of the Closing Date, each Seller shall have the right to transfer any Buyer Shares then remaining owned by such Seller. ARTICLE XII SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION 12.1 Survival. (a) The representations and warranties of the parties hereto contained in this Agreement or in any certificate, instrument or document delivered pursuant hereto shall survive the Closing, regardless of any investigation made by or on behalf of any party, until the fourth anniversary of the Closing Date (such anniversary, the "Survival Date"). From and after the Survival Date, no party hereto shall be under any liability whatsoever pursuant to this Article XII with respect to any such representation or warranty, except with respect to matters as to which notice has been received in accordance with Section 12.1(b). (b) No party hereto shall have any indemnification obligation pursuant to this Article XII in respect of any representation or warranty unless before the Survival Date it shall have received from the party seeking indemnification written notice of the existence of the claim for or in respect of which indemnification in respect of such representation or warranty is sought. Such notice shall set forth with reasonable specificity (i) the basis under this Agreement, and the facts that otherwise form the basis, of such claim, (ii) an estimate of the amount of such claim (which estimate shall not be conclusive of the final amount of such claim) and an explanation of the calculation of such estimate, including a statement of any significant assumptions employed therein, and (iii) the date on and manner in which the party delivering such notice became aware of the existence of such claim; provided, however, that any notice which the party seeking indemnification delivers to the indemnifying party prior to the Survival Date which notifies the indemnifying party of the existence of a claim with reasonable specificity and, notwithstanding the failure of such notice to meet the requirements set forth in clauses (i), (ii) and (iii) above, does not materially prejudice the indemnifying party's ability to defend such claim, shall be deemed to have met the requirement of delivery of notice prior to the Survival Date for the purpose of preserving the indemnified party's right to indemnification pursuant to this Article XII. 35 42 (c) The provisions of this Section shall have no effect upon any other obligation of the parties hereto under this Agreement, whether to be performed before, at or after the Closing. 12.2 Indemnification by Beall. (a) Subject to the terms and conditions of this Article XII, Beall shall indemnify, defend and hold harmless Buyer from and against any and all claims, actions, causes of action, demands, assessments, losses, damages, liabilities, judgments, settlements, penalties, costs and expenses (including reasonable attorneys' fees and expenses), of any nature whatsoever (collectively, "Damages"), asserted against, resulting to, imposed upon or incurred by Buyer, directly or indirectly, based upon, arising out of or otherwise in respect of the inaccuracy of any representation or warranty, or the breach of any covenant or agreement, of the Company or Sellers contained in this Agreement or in any certificate, agreement, instrument or document delivered pursuant hereto (collectively, with the Claims under subsection (b) of this Section 12.2, "Buyer Claims"). (b) Without limiting the generality of the indemnification agreement of Beall set forth in subsection (a) of this Section 12.2, Beall further agrees to indemnify, defend and hold harmless Buyer from and against any and all Damages asserted against, resulting to, imposed upon or incurred by Buyer, directly or indirectly, irrespective of the amount of such Damages (but subject to the limitations in Section 12.4(a)), from the Closing Date to the Survival Date based upon, arising out of or otherwise in respect of any of the following: (i) Any conflict, violation or default with respect to any bond, debenture, note, mortgage, indenture, lease, contract, agreement or other instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective properties may be bound that results from the execution, delivery and performance by Sellers and the Company of this Agreement or the consummation by them of the transactions contemplated hereby; or (ii) Any Proceeding disclosed on Part I of A of Schedule 3.8 (as it may be supplemented or amended pursuant to Section 6.11); provided, however, that indemnification under this Section 12.2(b)(ii) shall be limited to an amount equal to 60 percent of the aggregate amount of Damages under this Section 12.2(b)(ii). (c) Notwithstanding anything to the contrary contained in this Agreement, to the extent additional consideration pursuant to the provisions of Sections 1.3 or 1.6 is or would be available to Beall, any indemnification obligation of Beall required by this Section 12.2 shall be satisfied first to the extent possible by reducing Beall's right to receive his allocable portion of the Additional Shares, in the case of Section 1.3, or additional shares of Buyer Common Stock, in the case of Section 1.6, on and as of the Determination Date, the Third Anniversary or the Fourth Anniversary, as the case may be. The amount of reduction to Beall's allocable portion of the Additional Shares or additional shares of Buyer Common Stock, as the case may be, shall be calculated by dividing (i) the amount of the Buyer Claim by (ii) $8.77. 12.3 Indemnification by Buyer. Subject to the terms and conditions of this Article XII, Buyer shall indemnify, defend and hold harmless Sellers from and against any and all Damages asserted against, resulting to, imposed upon, or incurred by Sellers, directly or indirectly, based upon, arising out of or otherwise in respect of the inaccuracy of any representation or warranty, or the breach of any covenant or agreement, of Buyer contained in this Agreement or in any certificate, agreement, instrument or document delivered pursuant hereto. 36 43 12.4 Limitation of Liability. The indemnification obligations of the parties hereto pursuant to this Article XII shall be subject to the following limitations and other provisions: (a) No indemnification shall be required to be made by Beall pursuant to this Article XII with respect to any Buyer Claims except to the extent that the aggregate amount of Damages incurred by Buyer with respect to all Buyer Claims (whether asserted, resulting, imposed or incurred before, on or after the Closing Date) exceeds $25,000. No indemnification shall be required to be made by Beall pursuant to this Article XII with respect to any Buyer Claims to the extent that the aggregate amount of Damages incurred by Buyer with respect to all Buyer Claims (whether asserted, resulting, imposed or incurred before, on or after the Closing Date) exceeds $12,000,000. (b) No indemnification shall be required to be made by Buyer pursuant to this Article XII with respect to any Seller Claims except to the extent that the aggregate amount of Damages incurred by Sellers with respect to all Seller Claims (whether asserted, resulting, imposed or incurred before, on or after the Closing Date) exceeds $25,000. (c) The amount of Damages required to be paid by any party to indemnify any other party pursuant to this Article XII as a result of any Seller Claim or any Buyer Claim shall be reduced to the extent of any amounts actually received by such other party after the Closing Date pursuant to the terms of the insurance policies (if any) covering such claim. (d) The amount of Damages required to be paid by any party to indemnify any other party pursuant to this Article XII as a result of any Seller Claim or any Buyer Claim shall be reduced by the amount of any Tax benefit actually realized by such other party as a result of such claim, provided that such reduced amount shall be increased (but not above the original amount of damages) by the amount of any Taxes actually payable by such other party as a result of the payment to such other party of Damages for such claim (the net reduction is hereinafter referred to in this paragraph as the "Claim Reduction Amount"). The Claim Reduction Amount shall be calculated by the indemnified party on a present value basis using the appropriate applicable federal rate for the month that the claim will be paid as specified under Section 1274(d) of the Code. Any factual assumptions, Tax rate assumptions, assumptions relating to the appropriate applicable federal rate, or assumptions relating to the appropriate Tax treatment of a particular item shall be made in good faith by the indemnified party. The indemnified party shall supply to the indemnifying party such information as the indemnifying party may reasonably request to support the indemnified party's assumptions and calculations. If the indemnifying party believes that the overall calculation is unreasonably biased in favor of the indemnified party, the parties shall submit the issue to an independent public accounting firm of recognized national standing mutually agreeable to the parties for determination as to whether such calculation is in fact unreasonably biased in favor of the indemnified party on an overall basis. If such firm determines that the calculation is unreasonably biased in favor of the indemnified party, such firm shall modify whichever assumptions it deems necessary to make the overall calculation, in its opinion, fair to both the indemnifying party and the indemnified party. The determinations of such firm shall be final and conclusive as to any dispute regarding the Claim Reduction Amount. The costs and expenses of such firm in connection with its determinations pursuant to this paragraph shall be borne equally by the parties. Each party shall be solely responsible for all other costs and expenses incurred by such party pursuant to this paragraph. 12.5 Procedure for Indemnification. Promptly after receipt by an indemnified party under Section 12.2 or 12.3 of notice of the commencement of any action, administrative proceeding or tax audit (an "Action") such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under such Section, give written notice to the indemnifying party of the 37 44 commencement thereof, but the failure so to notify the indemnifying party shall not relieve it of any liability that it may have to any indemnified party except to the extent the indemnifying party demonstrates that the defense of such Action is prejudiced thereby. In case any such Action shall be brought against an indemnified party and it shall give written notice to the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. If the indemnifying party elects to assume the defense of such Action, the indemnified party shall have the right to employ separate counsel at its own expense and to participate in the defense thereof. If the indemnifying party elects not to assume (or fails to assume) the defense of such Action, the indemnified party shall be entitled to assume the defense of such Action with counsel of its own choice, at the expense of the indemnifying party. If the Action is asserted against both the indemnifying party and the indemnified party and there is a conflict of interests which renders it inappropriate for the same counsel to represent both the indemnifying party and the indemnified party, the indemnifying party shall be responsible for paying for separate counsel for the indemnified party; provided, however, that if there is more than one indemnified party, the indemnifying party shall not be responsible for paying for more than one separate firm of attorneys to represent the indemnified parties, regardless of the number of indemnified parties. If the indemnifying party elects to assume the defense of such Action, (a) no compromise or settlement thereof may be effected by the indemnifying party without the indemnified party's written consent (which shall not be unreasonably withheld) unless the sole relief provided is monetary damages that are paid in full by the indemnifying party and (b) the indemnifying party shall have no liability with respect to any compromise or settlement thereof effected without its written consent (which shall not be unreasonably withheld). 12.6 CERTAIN DAMAGE. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NO PARTY SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO ANY PERSON UNDER THIS AGREEMENT FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES OR FOR LOSS OF PROFITS THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH THEREOF, PROVIDED, IN NO EVENT SHALL ANY LOSSES OR DAMAGES PAYABLE AS A RESULT OF A THIRD PARTY CLAIM BE CONSIDERED INCIDENTAL OR CONSEQUENTIAL DAMAGES. ARTICLE XIII MISCELLANEOUS 13.1 Notices. All notices, requests, demands and other communications required or permitted to be given or made hereunder by any party hereto shall be in writing and shall be deemed to have been duly given or made if delivered personally, or transmitted by first class registered or certified mail, postage prepaid, return receipt requested, or sent by prepaid overnight delivery service, or sent by cable, telegram or telefax, to the parties at the following addresses (or at such other addresses as shall be specified by the parties by like notice): If to Buyer: Noble Drilling Corporation 10370 Richmond Avenue, Suite 400 Houston, Texas 77042 Attention: Mr. James C. Day, President Telefax: 713-953-1126 38 45 If to Beall or the Company: Mr. Joseph E. Beall President Triton Engineering Services Company 1201 Dairy Ashford Houston, Texas 77079 Telefax: 713-556-9074 If to Bruce: Mr. George H. Bruce c/o Triton Engineering Services Company 1201 Dairy Ashford Houston, Texas 77079 Telefax: 713-556-9074 13.2 Entire Agreement. This Agreement, together with the Schedules, Exhibits, Annexes and other writings referred to herein or delivered pursuant hereto, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. 13.3 Binding Effect; Assignment; No Third Party Benefit. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. Except as otherwise expressly provided in this Agreement, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties, except that Buyer may assign to any wholly owned subsidiary of Buyer any of Buyer's rights, interests, or obligations hereunder, upon notice to the other party or parties, provided that no such assignment shall relieve Buyer of its obligations hereunder. Except as provided in Article XII, nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties hereto, and their respective heirs, legal representatives, successors and permitted assigns, any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. 13.4 Severability. If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by Applicable Law. 13.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. 13.6 Further Assurances. From time to time following the Closing, at the request of any party hereto and without further consideration, the other party or parties hereto shall execute and deliver to such requesting party such instruments and documents and take such other action (but without incurring 39 46 any material financial obligation) as such requesting party may reasonably request in order to consummate more fully and effectively the transactions contemplated hereby. 13.7 Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only, do not constitute a part of this Agreement, and shall not affect in any manner the meaning or interpretation of this Agreement. 13.8 Gender. Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. 13.9 References. All references in this Agreement to Articles, Sections, and other subdivisions refer to the Articles, Sections, and other subdivisions of this Agreement unless expressly provided otherwise. The words "this Agreement", "herein", "hereof", "hereby", "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. Whenever the words "include", "includes" and "including" are used in this Agreement, such words shall be deemed to be followed by the words "without limitation". Each reference herein to a Schedule, Exhibit or Annex refers to the item identified separately in writing by the parties hereto as the described Schedule, Exhibit or Annex to this Agreement. All Schedules, Exhibits and Annexes are hereby incorporated in and made a part of this Agreement as if set forth in full herein. 13.10 Counterparts. This Agreement may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all, the parties hereto. 13.11 Injunctive Relief. The parties hereto acknowledge and agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement, and shall be entitled to enforce specifically the provisions of this Agreement, in any court of the United States or any state thereof having jurisdiction, in addition to any other remedy to which the parties may be entitled under this Agreement or at law or in equity. 13.12 Jurisdiction and Venue. In respect of any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, each of the parties hereto consents to the jurisdiction and venue of any federal or state court located within Harris County, Texas, waives personal service of any and all process upon it, consents that all such service of process may be made by first class registered or certified mail, postage prepaid, return receipt requested, directed to it at the address specified in Section 13.1, agrees that service so made shall be deemed to be completed upon actual receipt thereof, and waives any objection to jurisdiction or venue of, and waives any motion to transfer venue from, any of the aforesaid courts. 13.13 Joinder of Spouses. The spouses of Sellers have joined in the execution and delivery of this Agreement for the express purpose of binding their respective community property interests, if any, in the Shares. 13.14 Stock Exchange. If the Buyer Common Stock becomes listed and traded on the New York Stock Exchange, references herein to "the last sale price of the Buyer Common Stock (as reported 40 47 by NASDAQ/NMS)" shall be deemed to be changed to "the closing price of the Buyer Common Stock on the New York Stock Exchange." ARTICLE XIV DEFINITIONS 14.1 Certain Defined Terms. As used in this Agreement, each of the following terms has the meaning given it below: "affiliate" means, with respect to any person, any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person. "Affiliated Group" has the meaning set forth in Section 1504 of the Code. "Applicable Law" means any statute, law, rule or regulation or any judgment, order, writ, injunction or decree of any Governmental Entity to which a specified person or property is subject. "Code" means the Internal Revenue Code of 1986, as amended and in effect on the Closing Date. "Corporate Subsidiary" means any Subsidiary that is a corporation. "Encumbrances" means liens, charges, pledges, options, mortgages, deeds of trust, security interests, claims, restrictions (whether on voting, sale, transfer, disposition or otherwise), easements and other encumbrances of every type and description, whether imposed by law, agreement, understanding or otherwise. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Governmental Entity" means any court or tribunal in any jurisdiction (domestic or foreign) or any public, governmental or regulatory body, agency, department, commission, board, bureau or other authority or instrumentality (domestic or foreign). "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "Intellectual Property" means patents, trademarks, service marks, trade names, copyrights, trade secrets, know-how, inventions, and similar rights, and all registrations, applications, licenses and rights with respect to any of the foregoing. "IRS" means the Internal Revenue Service. "Partnership Subsidiary" means any Subsidiary that is a general or limited partnership, a joint venture or an asociacion en participacion. 41 48 "Permits" means licenses, permits, franchises, consents, approvals and other authorizations of or from Governmental Entities. "person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, enterprise, unincorporated organization or Governmental Entity. "Proceedings" means all proceedings, actions, claims, suits, investigations and inquiries by or before any arbitrator or Governmental Entity. "reasonable best efforts" means a party's best efforts in accordance with reasonable commercial practice and without the incurrence of unreasonable expense. "Securities Act" means the Securities Act of 1933, as amended. "Subsidiary" means (i) any corporation more than 50 percent of whose outstanding voting securities, or any partnership, joint venture, or other entity more than 50 percent of whose total equity interests, is owned, directly or indirectly, by the Company, (ii) 1201 Dairy Ashford Ltd. and (iii) the Asociacion en Participacion between Triton International, Inc. and Perforadora Faja de Oro, S.A. de C.V. Effective immediately prior to the Closing, the issued and outstanding shares of 1201 Dairy Ashford, Inc., the sole general partner of 1201 Dairy Ashford Ltd., will be distributed to Beall. "Taxes" means any income taxes or similar assessments or any sales, excise, occupation, use, ad valorem, property, production, severance, transportation, employment, payroll, franchise or other tax imposed by any United States federal, state or local (or any foreign or provincial) taxing authority, including any interest, penalties or additions attributable thereto. "Tax Return" means any return or report with respect to Taxes. "Treasury Regulations" means one or more treasury regulations promulgated under the Code by the Treasury Department of the United States. 14.2 Certain Additional Defined Terms. In addition to such terms as are defined in the opening paragraph of this Agreement and in Section 14.1, the following terms are used in this Agreement as defined in the references set forth opposite such terms: Defined Term Reference - - ------------ --------- Acquisition Proposal Section 6.2 Action Section 12.4 Additional Shares Section 1.3 Adjusted Excess 1994 EBDIT Section 1.3(a)(iii) agreements Section 3.18 Applicable Environmental Laws Section 3.20 associate Section 3.24 Audited Financial Statements Section 3.13 Audited 1993 Financial Statements Section 3.13 Benefit Arrangements Section 3.19(d) Buyer Claims Section 12.2 Buyer Commission Filings Section 4.12 42 49 Defined Term Section Reference - - ------------ ----------------- Buyer Common Stock Section 1.2 Buyer Shares Section 1.2 CERCLA Section 3.24 Claim Reduction Amount Section 12.4(d) Closing Article II Closing Date Article II Convertible Preferred Stock Section 4.4 Damages Section 12.2 Determination Date Section 1.3 Determination Date Rental Indemnification Amount Section 1.3(c) Disposal or Disposed Section 3.20 EBDIT Section 1.3(c) Employee Plans Section 3.19(a) Employment Agreement Section 6.7 Excess 1994 EBDIT Section 1.3(c) FASB Standards Section 3.13 Financial Statements Section 3.13 Fourth Anniversary Section 1.6 Hazardous Substance Section 3.20 Insurance Claims Payment Section 1.3(f) Latest Balance Sheet Section 3.13 Lease Indemnity Agreement Section 6.17 Multiemployer Plan Section 3.19(b) Net Claim Amount Section 1.3(b) net proceeds Section 1.3(b) 1993 Deficit Amount Section 1.3(b) Note Section 1.2(c) Number of Claim Shares Section 1.4(a) Office Lease Section 6.17 Option Holders Section 3.4 Outstanding Insurance Claims Section 3.9(b) Outstanding Options Section 3.4 Property Section 3.20(a) Purchase Price Section 1.2 RCRA Section 3.20 Registration Statement Section 6.6 Release Section 3.20 Rental Indemnification Shares Section 1.3(c) Section 1.3 Shares Section 1.4(a) Seller Claims Section 12.3 Shares Preamble Simmons Section 3.30 Solid Waste Section 3.20 Specific Contingent Assets Section 1.3(b) Specific Contingent Liabilities Section 1.3(b) Survival Date Section 12.1(a) 43 50 Defined Term Section Reference - - ------------ ----------------- Third Anniversary Section 1.6 Transaction Securities Section 3.12 transfer Section 11.1 Unaudited Financial Statements Section 3.13 IN WITNESS WHEREOF, the parties have executed this Agreement, or caused this Agreement to be executed by their duly authorized representatives, all as of the day and year first above written. TRITON ENGINEERING SERVICES COMPANY By: /s/ Joseph E. Beall ___________________________________ Name: Joseph E. Beall Title: President /s/ Joseph E. Beall ________________________________________ Joseph E. Beall /s/ Lois Rae Beall ________________________________________ Spouse of Joseph E. Beall /s/ George H. Bruce ________________________________________ George H. Bruce /s/ Mrs. George H. Bruce ________________________________________ Spouse of George H. Bruce NOBLE DRILLING CORPORATION By: /s/ James C. Day ___________________________________ Name: James C. Day Title: CEO & President 44 51 ANNEX I ALLOCATION OF PURCHASE PRICE
Allocable Portion of Name of Number of Purchase "Buyer "Cash" "Note Seller Shares Price Shares" Amount" Amount" ----------- --------- --------- ------- -------- -------- Joseph E. Beall 5,100 0.98456 751,864 $3,938,240 $3,938,240 George H. Bruce 80 0.01544 11,791 61,760 61,760 ------ ------- ------- ---------- ---------- TOTAL . . . . . . . . . 5,180 1.00000 763,655 $4,000,000 $4,000,000
52 EXHIBIT 1.2 PROMISSORY NOTE $_____________ Houston, Texas April __, 1994 FOR VALUE RECEIVED, the undersigned, Noble Drilling Corporation, a Delaware corporation, hereby promises to pay to the order of (Name of Seller) the principal sum of ____________ Dollars ($_________), with interest on the unpaid balance thereof from date until maturity at the rate or rates hereinafter provided, both principal and interest payable as hereinafter provided in lawful money of the United States of America at Houston, Texas. The unpaid principal of this Note from time to time outstanding shall bear interest prior to maturity, calculated on the basis of a 365 day year, at the prime rate announced by NationsBank of Texas, N.A. from time to time, provided that in no event shall such interest rate exceed the maximum interest rate permitted under applicable law. If hereafter the prime rate announced or published by such bank shall change, the rate of interest on the unpaid balance of principal of this Note prior to maturity shall be increased or decreased, as the case may be, from time to time as of the effective date of each change in the prime rate announced or published by such bank. All past due principal and/or interest or installments thereof shall bear interest at the highest rate for which the undersigned may legally contract under applicable law or, if no such rate is designated under applicable law, at the rate of ten percent (10%) per annum, calculated on the basis of a 365 day year. The principal amount of this Note, together with all interest accrued hereon, shall be due and payable in full on (date not more than six months after closing). Time is of the essence in the performance of this Note. The undersigned and all sureties, endorsers, guarantors and other parties hereafter assuming or otherwise becoming liable for the payment of any sum of money payable under this Note (i) severally waive grace, presentment and demand for payment, protest and notice of protest, notice of intent to accelerate the maturity, notice of acceleration of maturity, notice of non-payment and all other notices of whatsoever nature, filing of suit and diligence in collecting this note and (ii) severally agree that amounts due hereunder shall be paid without set-off, counterclaim, abatement, suspension or diminution. Upon the failure to pay any installment of the principal of or interest on this Note as above promised, the holder of this Note or any part hereof shall have the option of declaring the principal balance hereof and the interest accrued hereon to be immediately due and payable. The undersigned shall have the right to prepay, without premium or penalty, at any time and from time to time prior to maturity, all or any part of the unpaid principal balance of this Note, provided that any such principal thus paid is accompanied by all accrued interest thereon to the date of prepayment. It is the intent of the payee of this Note and the undersigned in the execution of this Note and all other instruments now or hereafter securing this Note to contract in strict compliance with applicable usury law. In furtherance thereof, the said payee and the undersigned stipulate and agree that none of the terms and provisions contained in this Note, or in any other instrument executed in connection herewith, shall ever be construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum interest permitted to be charged by applicable law. 53 Should the indebtedness represented by this Note or any part thereof be collected at law or in equity or through any bankruptcy, receivership, probate or other court proceedings or if this Note is placed in the hands of attorneys for collection after default, the undersigned and all endorsers, guarantors and sureties of this Note jointly and severally agree to pay in addition to the principal and interest due and payable hereon reasonable attorneys' and collection fees. Notices under this Note shall be given in the same manner as set forth in the Stock Purchase Agreement dated as of ____________, 1994 among Joseph E. Beall, George H. Bruce, Triton Engineering Services Company and Noble Drilling Corporation. The original payee of this Note shall not assign or transfer this Note or any interest therein without the prior written consent of the undersigned. THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED FOR ALL PURPOSES BY THE LAW OF THE STATE OF TEXAS AND THE LAW OF THE UNITED STATES APPLICABLE TO TRANSACTIONS WITHIN SUCH STATE. NOBLE DRILLING CORPORATION By ______________________________ Name: Title: -2- 54 EXHIBIT 1.7 OPTION HOLDER ALLOCATION
Name Percentage ---- ---------- Douglas S. Beall 39.76% Charles R. Erickson 27.83 Larry E. Thomas 19.76 Joseph L. Matthews 6.63 David M. Pierce 6.02 ------ 100.00%
EX-10.1 3 REGISTRATION DATED APRIL 22, 1994 1 REGISTRATION AGREEMENT THIS AGREEMENT is made as of April 22, 1994, between Noble Drilling Corporation, a Delaware corporation (the "Company"), and Joseph E. Beall ("Beall") (herein referred to as "Seller"). The Company and the Seller are parties to a Stock Purchase Agreement of even date herewith (the "Purchase Agreement"). Certain capitalized terms used herein shall have the meanings set forth in Section 7 hereof. Capitalized terms used herein without definition have the meaning given to them in the Purchase Agreement. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Shelf Registration. (a) Registration on S-3. The Company agrees to prepare and file with the Securities and Exchange Commission a shelf registration statement on Form S-3 (the "Registration Statement") and pursuant to Rule 415 under the Securities Act, covering the sale by the Seller of two-thirds of the number of Buyer Shares received by Seller at the Closing (the "Agreed Registration"). The Company shall use its Reasonable Best Efforts to cause the Registration Statement to be declared effective on a date that is approximately six months after the Closing Date and to keep the Registration Statement effective, so long as any shares registered thereunder remain unsold, for a period of two years after the Closing Date. The Seller agrees to furnish to the Company such information regarding the distribution of the Registrable Securities as the Company may from time to time reasonably request in writing and such other information as may be legally required in connection with the Agreed Registration. (b) Expenses. The Registration Expenses of the Seller in the Agreed Registration will be paid by the Company. The underwriting discounts or commissions and any selling commissions attributable to sales of Registrable Securities will be paid by the holders of the Registrable Securities pro rata based upon the number of shares of Registrable Securities held by them. (c) Priority on Registrations. The Company will not include in the Registration Statement any securities which are not Registrable Securities without the prior written consent of Seller. 2. Piggyback Registrations. (a) Right to Piggyback. In the event the Company fails to file the Agreed Registration referred to herein, or in the event the Agreed Registration is not declared effective or does not remain continuously effective until the earlier of the date that is two years after the Closing Date or the date on which Seller has sold all of his Registrable Securities registered under the Registration Statement, and thereafter until the fifth anniversary of the Closing Date, for so long as the Seller continues to hold Registrable Securities, whenever the Company proposes to register any of its Common Stock under the Securities Act other than (i) under employee compensation or benefit programs or (ii) an exchange offer or an offering of securities solely to the existing stockholders or employees of the Company, and the registration form to be used may be used for the registration of Registrable Securities, the Company will give prompt written notice to all holders of Registrable Securities of its intention to effect such a registration and will include in such registration all Registrable Securities with respect to which the 2 Company has received written requests for inclusion therein within 15 days after the receipt of the Company's notice (a "Piggyback Registration"). If the Company gives notice of such a proposed registration, the total number of Registrable Securities which shall be included in such registration shall be limited to such number, if any, as in the reasonable opinion of the manager of such offering would not adversely affect the marketability or offering price of all of the securities proposed to be offered by the Company in such offering; provided, however, if the holders of Registrable Securities having registration rights upon a Piggyback Registration are not permitted to include all of such Registrable Securities by reason of such determination by the manager of the offering, the Registrable Securities to be included in the offering shall be determined in accordance with paragraphs 2(c) and 2(d) below. Notwithstanding the foregoing, the Company may, in its sole discretion and without the consent of any holder of Registrable Securities, withdraw such registration statement and abandon such proposed public offering. (b) Piggyback Expenses. The Registration Expenses of the holders of Registrable Securities will be paid by the Company in all Piggyback Registrations. The underwriting discounts or commissions and any selling commissions attributable to sales of Registrable Securities will be paid by the holders of the Registrable Securities pro rata based upon the number of shares of Registrable Securities held by them. (c) Priority on Primary Registrations. If a Piggyback Registration is a primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the Company, the Company will include in such registration (i) first, the securities the Company proposes to sell, (ii) second, other securities requested to be registered pursuant to other registration agreements entered into by the Company on or before six months prior to the Company's notice given under paragraph 2(a) above, (iii) third, the Registrable Securities requested to be included in such registration, pro rata among the holders thereof on the basis of the number of shares of such Registrable Securities requested to be included in such registration by each such holder, and (iv) fourth, other securities requested to be included in such registration. (d) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Company's securities, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the holders initially requesting such registration, the Company will use its Reasonable Best Efforts to include in such registration (i) first, the securities requested to be included therein by the holders requesting such registration, (ii) second, the Registrable Securities requested to be included in such registration, pro rata among the holders of such securities on the basis of the number of such securities requested to be included in such registration by each such holder, and (iii) third, other securities requested to be included in such registra- tion. 3. Registration Procedures. Whenever the holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use Reasonable Best Efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company will as expeditiously as possible: -2- 3 (a) prepare and file with the Securities and Exchange Commission a registration statement on the appropriate form with respect to such Registrable Securities and use its Reasonable Best Efforts to cause such registration statement to become effective (provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to the counsel selected by the holders of a majority of the Registrable Securities covered by such registration statement copies of all such documents proposed to be filed, which documents will be subject to the review of such counsel); (b) prepare and file with the Securities and Exchange Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period set forth in Section 1(a) above in connection with the Agreed Registration, and otherwise for a period of not less than 120 consecutive days or such shorter period which will terminate when Registrable Securities covered by such registration statement have been sold (but not before the expiration of the applicable prospectus delivery period) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement; (c) furnish to each seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including, without limitation, each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller; (d) use its Reasonable Best Efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions within the United States as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such juris- dictions of the Registrable Securities owned by such seller (provided that the Company will not be required to qualify generally to do business or subject itself to any general service of process in any jurisdiction where it is otherwise not then so subject); (e) notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event which requires the making of any change in the prospectus included in such registration statement so that such document will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, at the request of any such seller, the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; (f) use its Reasonable Best Efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if not so listed, on the exchange or exchanges or the over-the-counter market of the National Association of Securities Dealers, Inc. selected by the Company and reasonably satisfactory to the holders of a majority of the then outstanding Registrable Securities; -3- 4 (g) cooperate with the selling holders of Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends and enable such Registrable Securities to be in such denominations and registered in such names as may be requested at least two business days prior to any sale of registrable Securities; (h) enter into such customary agreements (including, without limitation, underwriting agreements in customary form, substance, and scope) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; (i) make available for inspection by a representative of the sellers of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney or accountant retained by any such seller or underwriter, all financial and other records (reasonably requested), pertinent corporate documents and properties of the Company as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with such registration statement; provided, however, each seller of Registrable Securities agrees that any records, information or documents that are designated by the Company as confidential shall not be used by such seller as the basis for any market transaction in securities of the Company unless and until such record, information or document is made generally available to the public and each such seller shall keep and shall cause any attorney or accountant retained by such seller to keep, confidential any record, information or document designated by the Company as confidential; (j) otherwise use its Reasonable Best Efforts to comply with all applicable rules and regulations of the Securities and Exchange Commission, and make generally available to its security holders an earnings statement no later than 90 days after the end of the 12 month period beginning with the first day of the Company's first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (k) permit any holder of Registrable Securities, which holder, in its reasonable judgment, might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such registration or comparable statement and to comment thereon; (l) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any common stock included in such registration statement for sale in any jurisdiction, the Company will use reasonable efforts promptly to obtain the withdrawal of such order; (m) use its Reasonable Best Efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of such Registrable Securities; and -4- 5 (n) use its Reasonable Best Efforts to obtain a cold comfort letter from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the holders of a majority of the Registrable Securities being sold in such registration reasonably request. 4. Registration Expenses. (a) All expenses incident to the Company's performance of or compliance with this Agreement, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing and engraving expenses, messenger and delivery expenses and fees and disbursements of counsel for the Company and one representa- tive counsel for all holders of Registrable Securities whose shares are being registered and all independent certified public accountants, underwriters (excluding underwriting discounts and any selling commissions) and any Persons retained by the Company (all such expenses being herein called "Registration Expenses"), will be borne as provided in this Agreement, except that the Company will, in any event, pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed or on the exchange or exchanges or the over-the-counter market of the National Association of Securities Dealers, Inc. (b) To the extent expenses of registration (including underwriting discounts and any selling commissions) are not required to be paid by the Company, each holder of securities included in any registration hereunder will pay those Registration Expenses allocable to the registration of such holder's securities so included, and any Registration Expenses not so allocable will be borne by all sellers of securities included in such registration in proportion to the aggregate selling price of the securities to be so registered. 5. Indemnification. (a) Indemnification by the Company. The Company shall indemnify and hold harmless, with respect to any registration statement filed by it, to the fullest extent permitted by law, each holder of Registrable Securities covered by such registration statement, its officers, directors, employees, agents and general or limited partners (and the directors, officers, employees and agents thereof), and each other person, if any, who controls such holder within the meaning of Section 15 of the Securities Act (collectively, "Holder Indemnified Parties") against all losses, claims, damages, liabilities and expenses, joint or several, (including, without limitation, reasonable fees of counsel and any amounts paid in settlement effected with the Company's consent, which consent shall not be unreasonably withheld) to which any such Holder Indemnified Party may become subject under the Securities Act, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) are caused by (1) any untrue statement or alleged untrue statement of a material fact contained in any registration statement in which such Registrable Securities were included as contemplated hereby or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (2) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus, together with the documents incorporated by reference therein (as amended or supplemented if the Company shall have filed with the Commission any amendment thereof or supplement thereto), or the omission or alleged omission to state therein a material fact required to -5- 6 be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (3) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action of or inaction by the Company in connection with any such registration; and in each such case, the Company shall reimburse each such Holding Indemnified Party for any reasonable legal or any other expenses incurred by any of them in connection with investigating or defending any such loss, claim, damage, liability, expense, action or proceeding; provided, however, that the Company shall not be liable to any such Holder Indemnified Party in any such case to the extent that any such loss, claim, damage, liability or expense (or action or proceeding, whether commenced or threatened, in respect thereof) arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement or amendment thereof or supplement thereto or in any such preliminary, final or summary prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of any such Holder Indemnified Party relating to such Holder Indemnified Party for use in the preparation thereof; and provided further, that the Company shall not be liable to any such Holder Indemnified Party with respect to any preliminary prospectus to the extent that any such loss, claim, damage, liability or expense of such Holder Indemnified Party results from the fact that such Holder Indemnified Party sold Registrable Securities to a person to whom there was not sent or given, at or before the written confirmation of such sale, a copy of the prospectus (excluding documents incorporated by reference) or of the prospectus as then amended or supplemented (excluding documents incorporated by reference) if the Company has previously furnished copies thereof to such Holder Indemnified Party in compliance with this Agreement and the loss, claim, damage, liability or expense of such Holder Indemnified Party results from an untrue statement or omission of a material fact contained in such preliminary prospectus which was corrected in the prospectus (or the prospectus as amended or supplemented). Such indemnity and reimbursement of expenses and obligations shall remain in full force and effect regardless of any investigation made by or on behalf of the Holder Indemnified Parties and shall survive the transfer of such securities by such Holder Indemnified Parties. (b) Indemnification by Holders. Each holder of Registrable Securities participating in any registration hereunder shall indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees and agents, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act) (collectively, "Company Indemnified Parties") against all losses, claims, damages, liabilities and expenses, joint or several (including, without limitation, reasonable fees of counsel and any amounts paid in settlement effected by such holder's consent, which consent shall not be unreasonably withheld) to which any Company Indemnified Party may become subject under the Securities Act, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) are caused by (1) any untrue statement or alleged untrue statement of a material fact contained in any registration statement in which such holder's Registrable Securities were included or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (2) any untrue statement or alleged untrue statement of a material fact contained in any preliminary, final or summary prospectus, together with the documents incorporated by reference therein (as amended or supplemented if the Company shall have filed with the Commission any amendment thereof or supplement thereto), or the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading to the extent, but only to the extent, in the cases described in clauses (1) and (2), that such untrue statement or omission is contained in any information furnished in writing by such holder relating to such holder for use in the preparation thereof and if the Company does not know, at the time -6- 7 such information is included in the registration statement, prospectus, preliminary prospectus, amendment or supplement, that such information is false or misleading, (3) any violation by such holder of any federal, state or common law rule or regula- tion applicable to such holder and relating to action of or inaction by such holder in connection with any such registration, and (4) with respect to any preliminary prospectus, the fact that such holder sold Registrable Securities to a person to whom there was not sent or given, at or before the written confirmation of such sale, a copy of the prospectus (excluding the documents incorporated by reference) or of the prospectus as then amended or supplemented (excluding documents incorporated by reference) if the Company has previously furnished copies thereof to such holder in compliance with this Agreement and the loss, claim, damage, liability or expense of such Company Indemnified Party results from an untrue statement or omission of a material fact contained in such preliminary prospectus which was corrected in the prospectus (or the prospectus was amended or supplemented); provided, however, that the aggregate amount which any such holder shall be required to pay pursuant to this paragraph (b) shall be limited to the dollar amount of proceeds received by such holder upon the sale of the Registrable Securities and other securities of the Company (after deducting any underwriting commissions, discounts and transfer taxes applicable thereto) pursuant to the registration statement giving rise to such claim. Such indemnity obligation shall remain in full force and effect regardless of any investigation made by or on behalf of the Company Indemnified Parties (except as provided above) and shall survive the transfer of such securities by such holder. (c) Conduct of Indemnification Proceedings. Promptly after receipt by an indemnified party under paragraph (a) or (b) of written notice of the commencement of any action, suit, proceeding, investigation or threat thereof made in writing with respect to which a claim for indemnification may be made pursuant to this Section 5, such indemnified party shall, if a claim in respect thereto is to be made against an indemnifying party, give written notice to the indemnifying party of the threat or commencement thereof; provided, however, that the failure to so notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. If any such claim or action referred to under paragraph (a) or (b) is brought against any indemnified party and it then notifies the indemnifying party of the threat or commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party). After notice from the indemnifying party to such indemnified party of its election so to assume the defense of any such claim or action, the indemnifying party shall not be liable to such indemnified party under this Section 6 for any legal expenses of counsel or any other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation unless the indemnifying party has failed to assume the defense of such claim or action or to employ counsel reasonably satisfactory to such indemnified party. The indemnifying party shall not be required to indemnify the indemnified party with respect to any amounts paid in settlement of any action, proceeding or investigation entered into without the written consent of the indemnifying party, which consent shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement without the consent of the indemnified party unless (1) such judgment or settlement does not impose any obligation or liability upon the indemnified party other than the execution, delivery or approval thereof, and (2) such judgment or settlement includes as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a full release and discharge from all liability in respect of such claim for all persons that may be entitled to or obligated to provide indemnification or contribution under this Section 5. -7- 8 (d) Additional Indemnification. Indemnification similar to that specified in the preceding subsections of this Section 5 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or qualification of securities under any state securities or blue sky laws. (e) Contribution. If the indemnification provided for in this Section 5 is unavailable to or insufficient to hold harmless an indemnified party under paragraph (a) or (b), then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions or proceedings in respect thereof) referred to in paragraph (a) or (b) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other in connection with the statements, omissions, actions or inactions which resulted in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or the indemnified party, any action or inaction by any such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement, omission, action or inaction. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions or proceedings in respect thereof) pursuant to this paragraph (e) shall be deemed to include, without limitation, any reasonable legal or other expenses incurred by such indemnified party in connection with investigating or defending any such action or claim (which shall be limited as provided in paragraph (c) if the indemnifying party has assumed the defense of any such action in accordance with the provisions thereof) which is the subject of this paragraph (e). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Promptly after receipt by an indemnified party under this paragraph (e) of written notice of the commencement of any action, suit, proceeding, investigation or threat thereof made in writing with respect to which a claim for contribution may be made against an indemnifying party under this paragraph (e), such indemnified party shall, if a claim for contribution in respect thereto is to be made against an indemnifying party, give written notice to the indemnifying party in writing of the commencement thereof (if the notice specified in paragraph (c) has not been given with respect to such action); provided, however, that the failure to so notify the indemnifying party shall not relieve it from any obligation to provide contribution which it may have to any indemnified party under this paragraph (e) except to the extent that the indemnifying party is actually prejudiced by the failure to give notice. Notwithstanding anything in this paragraph to the contrary, no indemnifying party (other than the Company) shall be required pursuant to this paragraph to contribute any amount which exceeds the amount by which the dollar amount of the proceeds received by such indemnifying party from the sale of Registrable Securities and other securities of the Company (after deducting any underwriting commissions, discounts and transfer taxes applicable thereto) in the offering to which the losses, claims, damages, liabilities or expenses of the indemnified parties relate exceeds the amount of any losses, claims, damages, liabilities and expenses which such indemnifying party has otherwise been required to pay as indemnity or contribution hereunder by reason of such losses, claims, damages, liabilities or expenses. The parties hereto agree that it would not be just and equitable if contribution pursuant to this paragraph were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. -8- 9 If indemnification is available under Section 5, the indemnifying parties shall indemnify each indemnified party to the fullest extent provided in paragraphs (a) and (b), without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this paragraph. The provisions of this paragraph shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract, shall remain in full force and effect regardless of any investigation made by or on behalf of any indemnified party, and shall survive the transfer of securities by any such party. (f) Indemnification and Contribution of Underwriters. In connection with any underwritten offering contemplated by this Agreement which includes Registrable Securities, the Company and all sellers of Registrable Securities included in any registration statement shall agree to customary provisions for indemnification and contribution (consistent with the other provisions of this Section 5) in respect of losses, claims, damages, liabilities and expenses of the underwriters of such offering. 6. Participation in Underwritten Registrations. No Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements; provided that no holder of Registrable Securities included in any underwritten registration shall be required to make any representations or warranties to the Company or the underwriters on account of the registration of shares owned by such holder other than representations and warranties regarding such holder and such holder's intended method of distribution. 7. Definitions. "Common Stock" means the Common Stock of the Company, par value $0.10 per share. "Piggyback Registration" has the meaning set forth in Section 2. "Registrable Securities" means (i) the Buyer Shares and the Additional Shares (as such terms are defined in the Purchase Agreement) and (ii) any Common Stock issued or issuable with respect to the securities referred to in clause (i) whether by way of a stock dividend or stock split, in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization, or otherwise; provided, that Registrable Securities shall not include any securities that have been sold, including, without limitation, pursuant to the Agreed Registration, a Piggyback Registration or Rule 144, or that qualify for sale or that otherwise can be sold by Seller without registration under the Securities Act, including, without limitation, pursuant to Rule 144(k). "Reasonable Best Efforts" means a party's best efforts in accordance with reasonable commercial practice and without the incurrence of unreasonable expense. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal law then in force. 9. Miscellaneous. (a) GECC Registration Rights Agreement. The Company is subject to that certain Registration Rights Agreement dated as of January 29, 1988 by and between the Company and General -9- 10 Electric Capital Corporation, a New York corporation ("GECC"), as amended by the first amendment thereto dated as of February 5, 1993 (the "GECC Agreement"), a copy of which has been furnished to Seller. Section 1.13 of the GECC Agreement prevents the Company from entering into any agreement with any holder or prospective holder of any securities of the Company that grants registration rights under the Securities Act on terms and conditions more favorable than the rights granted to GECC in the GECC Agreement. The Company has obtained GECC's acknowledgment and agreement that the terms and conditions of the Agreed Registration are acceptable to GECC and do not violate the GECC Agreement. If the provisions of this Agreement relating to the grant of Piggyback Registration rights or the application of such provisions or any portion thereof shall be found to grant registration rights more favorable to any holder or prospective holder of any securites of the Company than the rights granted to GECC in the GECC Agreement, such provisions of this Agreement, or portion of such provisions, (and only such provisions) shall be held invalid and of no further force and effect. (b) No Inconsistent Agreements. From and after the date of this Agreement, the Company will not, without the prior written consent of the holders of a majority of the number of Registrable Securities then outstanding, enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the holders of Registrable Securities in this Agreement. (c) Undertakings of the Holders of Registrable Securities. (i) If any Registrable Securities are included in a registration statement, the holder thereof will not (until further notice) effect sales thereof after receipt of telegraphic or written notice from the Company to suspend sales to permit the Company to correct or update a registration statement or prospectus; provided that the obligations of the Company with respect to maintaining any registration statement current and effective shall be extended by a period of days equal to the period said suspension is in effect. (ii) If any Registrable Securities are being registered in any registration pursuant to this Agreement, the holder thereof will comply with all anti-stabilization, manipulation and similar provisions of Section 10 of the Securities Exchange Act of 1934, as amended, and any rules promulgated thereunder by the Commission and, at the request of the Company, will execute and deliver to the Company and to any underwriter participating in such offering, an appropriate agreement to such effect. (iii) At the end of the period during which the Company is obligated to keep a registration statement current and effective as described herein, the holders of Registrable Securities included in the registration statement shall discontinue sales thereof pursuant to such registration statement upon receipt of notice from the Company of its intention to deregister any of such securities which remain unsold. (d) Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal law, and not the law of conflicts, of the State of Texas. (e) Successors and Assigns; No Third Party Benefit. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the -10- 11 benefit of purchasers or holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent holder of Registrable Securities. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto and then respective successors and assigns any right or remedies under or by reason of the Agreement, except as expressly provided in this Agreement. (f) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter herein contained. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company with respect to the securities acquired by the holders of the Registrable Securities pursuant to the Purchase Agreement. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. (g) Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally or sent by reputable express courier service (charges prepaid), or mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, or sent by telefax, to the parties at the following address (or to such other address or to the attention of such other person as the recipient party has specified by prior like notice to the sending party): If to the Company: Noble Drilling Corporation 10370 Richmond Avenue, Suite 400 Houston, Texas 77042 Attention: President Telefax: 713-953-1126 If to Beall: Mr. Joseph E. Beall c/o Triton Engineering Services Company 1201 Dairy Ashford Houston, Texas 77079 Telefax: 713-556-9074 (h) Severability. If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by Applicable Law. (i) Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only, do not constitute a part of this Agreement, and shall not affect in any manner the meaning or interpretation of this Agreement. -11- 12 (j) Gender. Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. (k) References. All references in this Agreement to Articles, Sections, and other subdivisions refer to the Articles, Sections, and other subdivisions of this Agreement unless expressly provided otherwise. The words "this Agreement," "herein," "hereof," "hereby," "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. (l) Counterparts. This Agreement may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all, the parties hereto. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NOBLE DRILLING CORPORATION By:/s/ JAMES C. DAY James C. Day Chairman, President, and Chief Executive Officer /s/ JOSEPH E. BEALL Joseph E. Beall -12- EX-10.2 4 EMPLOYMENT AGREEMENT DATED APRIL 22, 1994 1 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (this "Agreement"), dated as of April 22, 1994, between Triton Engineering Services Company, a Texas corporation (the "Company"), and Joseph E. Beall, an individual residing in Houston, Texas (the "Employee"). WHEREAS, the Employee and the other shareholder of the Company have agreed to sell all the outstanding shares of common stock of the Company to Noble Drilling Corporation ("Buyer"); and WHEREAS, the Company desires to assure itself of the Employee's continued employment with the Company, and the Employee desires to continue in the employ of the Company, on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Company and the Employee hereby agree as follows: 1. Employment. The Company agrees to continue the Employee in its employ, and the Employee agrees to remain in the employ of the Company, for the period set forth in Paragraph 2, in the position and with the duties and responsibilities set forth in Paragraph 3 and upon the other terms and conditions herein provided. 2. Term. The employment of the Employee by the Company as provided in Paragraph 1 shall be for a period commencing on the date of this Agreement through and ending on April 21, 1997, unless sooner terminated as herein provided (the "Employment Term"). 3. Position and Duties. (a) The Employee shall serve the Company as President, and shall report to, and be subject to the general direction and control of, the Board of Directors of the Company. The Employee shall perform the duties as are from time to time assigned to him by the Company. The Employee also agrees to perform, without additional compensation, such other services for the Company and for any subsidiary or affiliate of the Company in which the Company has an interest, as the Board of Directors of the Company shall from time to time reasonably specify. (b) During the Employment Term, the Employee shall devote his full time, skill and attention to the business and affairs of the Company, and in furtherance of the business and affairs of the Company, to the extent necessary to discharge faithfully and efficiently the duties and responsibilities delegated and assigned to the Employee herein or pursuant hereto, except for usual, ordinary and customary periods of absence due to illness or other disability and six weeks of paid vacation per year. The foregoing shall not be construed as preventing the Employee from making investments in other businesses or enterprises provided such investments do not require the provision of substantial services by the Employee to the operations or affairs of such businesses or enterprises such that the provision thereof would interfere in any respect with the performance of the Employee's duties and responsibilities hereunder. (c) The Employee shall serve, if elected or appointed, as a director of the Company, as a director or officer of any subsidiary or affiliate of the Company, and as a member of any committee of the Board of Directors of the Company or any subsidiary or affiliate thereof. Any such service shall 2 be without further compensation, except that Employee shall be paid such compensation, if any, as is paid to other directors (solely in their capacity as director) who are also employees of the Company or any subsidiary or affiliate thereof. (d) For purposes of this Section 3, an affiliate shall only include companies or entities controlled by the Company, and shall not include any other companies or entities controlled by or under common control with Buyer. 4. Compensation and Related Matters. (a) Base Salary. The Company shall pay to the Employee a minimum base salary ("Base Salary") of $200,000 per year. The Base Salary is to be payable in installments in accordance with the payroll policies of the Company in effect from time to time during the Employment Term. During the Employment Term, Employee shall be entitled to have his performance reviewed in accordance with the policies, practices and procedures of Buyer from time to time in effect for reviewing the compensation of executive officers of subsidiaries of Buyer, and such Base Salary may be increased if it is determined such increase is warranted. (b) Vacation. The Employee shall be entitled to six weeks paid vacation during each calendar year. The Employee agrees to use reasonable efforts to utilize his vacation at such time or times as are (i) consistent with the proper performance of his duties and responsibilities hereunder and (ii) mutually convenient for the Company and the Employee. (c) Other Benefits. The Employee shall be entitled to other benefits in accordance with the policies, practices and procedures of the Company and its affiliates from time to time in effect, commensurate with the Employee's position. Without limiting the provisions of the immediately preceding sentence, the Employee shall be entitled to the following benefits at the sole expense of the Company: (i) the purchase, prior to the closing of Buyer's purchase of the outstanding shares of common stock of the Company, of Employee's current automobile from the Company at the Company's book value at December 31, 1993; and (ii) $5,000,000 of split-dollar life insurance currently in effect on the Employee's life, with the Employee to own such insurance policy and to have the right to choose the beneficiary or beneficiaries thereof. 5. Termination of Employment. (a) Death. The Employee's employment hereunder shall terminate automatically upon his death. (b) Disability. The Employee's employment hereunder shall terminate automatically upon the total and permanent disability (whether physical or mental) ("Disability") of the Employee, as determined by Employee's doctor, who shall be reasonably acceptable to Buyer. -2- 3 (c) Termination by Company. The Company may terminate the Employee's employment hereunder for Cause (as defined below). For purposes of this Agreement, "Cause" shall mean any of the following: (i) conduct by the Employee that constitutes willful misconduct or gross negligence in the performance of his duties hereunder, continuing for ten (10) days after written notice of need to cure, if curable; (ii) conduct by the Employee that constitutes fraud, dishonesty or a criminal act with respect to the Company; (iii) embezzlement of funds or misappropriation of other property by the Employee from the Company or any subsidiary or affiliate thereof; (iv) conviction of the Employee of a felony or of any other crime involving fraud, dishonesty or moral turpitude; (v) the willful and continued failure by the Employee to substantially perform his duties hereunder (other than any such failure resulting from illness of or injury to the Employee or the Employee's physical or mental incapacity), after demand for substantial performance is delivered by the Company that specifically identifies the manner in which the Company believes the Employee has not substantially performed his duties; (vi) a material breach by the Employee of the Employee's obligations under Paragraph 3 (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on the Employee's part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company, and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach; or (vii) the willful and material breach by the Employee of any of the material provisions of this Agreement. (d) Notice of Termination. Any termination of the Employee's employment hereunder by the Company (other than a termination pursuant to Paragraph 5(a)) shall be communicated by a Notice of Termination (as defined below) to the Employee. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) in the case of a termination for Disability or Cause, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee's employment under the provision so indicated and (iii) specifies the Date of Termination (as defined in Paragraph 5(e) below). The failure by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Disability or Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company's rights hereunder. (e) Date of Termination. For purposes of this Agreement, "Date of Termination" shall mean the effective date of termination of the Employee's employment hereunder, which date shall be (i) if the Employee's employment is terminated by his death, the date of his death, (ii) if the Employee's -3- 4 employment is terminated because of his Disability, the date his Disability has prevented Employee from performing his duties hereunder for four (4) consecutive months, (iii) if the Employee's employment is terminated by the Company for Cause, the date on which the Notice of Termination is given, and (iv) if the Employee's employment is terminated for any other reason, the date specified in the Notice of Termination, which date shall in no event be earlier than the date such notice is given. (f) Resignation. In the event of termination of the Employee's employment hereunder (for any reason other than the death of the Employee), the Employee agrees that if at such time he is a director or officer of the Company or any of its subsidiaries or affiliates, he will promptly deliver to the Company his written resignation from all such positions, such resignation to be effective as of the Date of Termination. 6. Obligations of Company Upon Termination of Employment. (a) Death or Disability. If the Employee's employment hereunder is terminated by reason of the Employee's death or Disability, the Company shall pay to the Employee's estate, in the case of death, and to the Employee or the Employee's estate, in the case of Disability, in a lump sum in cash within thirty (30) days after the Date of Termination, the Employee's Base Salary and any vested benefits to which he is entitled and reimbursements due through the Date of Termination, to the extent not theretofore paid. (b) Termination for Cause. If the Employee's employment hereunder is terminated for Cause, the Company shall pay to the Employee, in a lump sum in cash within thirty (30) days after the Date of Termination, the Employee's Base Salary and any vested benefits to which he is entitled and reimbursements due through the Date of Termination, to the extent not theretofore paid, and, thereafter, the Company shall have no further obligations to the Employee under this Agreement, except as provided in Paragraph 15. (c) Termination by Employee. If the Employee's employment hereunder is terminated by the Employee, the Company shall pay to the Employee, in a lump sum in cash within thirty (30) days after the Date of Termination, the Employee's Base Salary and any vested benefits to which he is entitled and reimbursements due through the Date of Termination, to the extent not theretofore paid. (d) Termination by Company Other Than for Cause. If the Employee's employment hereunder is terminated by the Company other than for the Employee's death, for Cause, for Disability or pursuant to the provisions of Paragraph 2, the Company shall pay to the Employee, in a lump sum in cash within thirty (30) days after the Date of Termination, the aggregate of the following amounts: (i) the Employee's Base Salary and any vested benefits to which he is entitled and reimbursements due through the Date of Termination at the rate in effect hereunder at the time the Notice of Termination is given, to the extent not theretofore paid; and (ii) the Employee's Base Salary at the rate in effect hereunder at the time the Notice of Termination is given through the remainder of the Employment Term; provided, however, that if the Company fails to make any of the payments specified in subparagraph (i) above by the thirtieth (30th) day after the Date of Termination, the Employee's Base Salary shall continue to be earned through the date of payment. -4- 5 (e) Remedies. The right to receive the payments and other benefits provided for under this Paragraph 6 shall be the Employee's sole and exclusive remedy for the termination of his employment hereunder and shall be in lieu of any claim that he might otherwise have against the Company arising from such termination. Notwithstanding anything to the contrary herein, if termination of Employee's employment results from a breach of this Agreement by the Company, as determined by a court of competent jurisdiction, Employee shall be entitled to receive, as his sole and exclusive remedy and in lieu of any claim that he might otherwise have against the Company arising from such termination, the payments and other benefits to which he is entitled as a result of such breach, plus interest thereon and the fees and costs to which Employee is entitled under Paragraph 12. 7. Compliance With Other Agreements. (a) The Company represents and warrants to the Employee that the execution, delivery and performance by the Company of this Agreement have been duly authorized by all necessary corporate action of the Company and do not and will not conflict with or result in a violation of any provision of, or constitute a default under, any contract, agreement, instrument or obligation to which the Company is a party or by which it is bound. (b) The Employee represents and warrants to the Company that the execution, delivery and performance by the Employee of this Agreement do not and will not conflict with or result in a violation of any provision of, or constitute a default under, any contract, agreement, instrument or obligation to which the Employee is a party or by which he is bound. 8. Noncompetition and Related Matters. (a) During the Employment Term and for a period of two years following the termination of the Employment Term, the Employee shall not, directly or indirectly, for his own account or for the benefit of any other person, engage or participate in, or own any interest in, provide any financing for, perform any service for or act in any other capacity for any business or organization which engages or participates, directly or indirectly, in, any business or activity in the State of Texas or in any other area in which the Company, Buyer or any of either's subsidiaries or affiliates operates, that, in the good faith judgment of the Board of Directors of the Company, is in substantial and direct competition with the business of the Company, Buyer or any of either's subsidiaries or affiliates conducted by them during or at the termination of the Employment Term within any state in which the Company, Buyer or any of either's subsidiaries or affiliates is conducting or has conducted its business during the Employment Term. (b) During the two-year period commencing on the date of termination of the Employee's employment hereunder, the Employee shall not, directly or indirectly, for his own account or for the benefit of any other person: (i) employ, solicit for employment or advise or recommend to any other person that such other person employ or solicit for employment, any employee of the Company or any of its subsidiaries or affiliates (other than any member of Employee's immediate family); (ii) solicit or induce, or in any manner attempt to solicit or induce, any customer of the Company or any of its subsidiaries or affiliates (A) to cease being, or any prospective customer not to become, a customer of the Company or any of its subsidiaries or affiliates or -5- 6 (B) to divert any business of such customer from the Company or any of its subsidiaries or affiliates; or (iii) otherwise interfere with, disrupt or attempt to interfere with or disrupt the relationship, contractual or otherwise, between the Company or any of its subsidiaries or affiliates and any of their respective customers, clients, suppliers, consultants or employees. (c) The Employee regards the restrictions contained in this Paragraph 8 as reasonable in scope, duration and geographic territory and as designed to provide the Company with limited, legitimate and reasonable protection against subsequent diminution of the value of the business of the Company and its subsidiaries attributable to any actions of the Employee contrary to such restrictions. The Employee acknowledges that irreparable damage would occur in the event any of the provisions of this Paragraph 8 were breached and accordingly agrees that the Company shall be entitled (without being required to prove damages or furnish any bond or other security) to an injunction or injunctions to prevent breaches of the provisions of this Paragraph 8, and shall be entitled to enforce specifically the provisions of this Paragraph 8, in any court of the United States or any state thereof having jurisdiction, in addition to any other remedy to which the Company may be entitled under this Agreement or at law or in equity. It is the intent and understanding of the parties hereto that if, in any action before any court or governmental entity legally empowered to enforce the provisions of this Paragraph 8, any term, restriction, covenant or promise in this Paragraph 8 is found to be unreasonable and for that reason unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such court or governmental entity. Further, during any period in which the Employee is in breach of any covenant contained in Paragraph 8(a), the time period of such covenant shall be extended for an amount of time that the Employee is in breach thereof. (d) Nothing contained in this Paragraph 8 shall be construed to prohibit the Employee from investing in stock or other securities of a corporation or other entity which has a class of equity securities listed on a national securities exchange or actively traded in the over-the-counter market, provided that the Employee shall not perform any services on behalf of, or in the operation of the affairs of, such corporation or other entity. (e) Nothing contained in this Paragraph 8 shall be construed to prevent the Employee from serving on the board of directors of any company not in competition with the Company, Buyer or any of either's subsidiaries or affiliates; provided, however, that any such directorship would be subject to prior approval by Buyer in accordance with Buyer's then existing policy and practice, which approval would not be unreasonably withheld. (f) The covenants of the Employee contained in this Paragraph 8 are ancillary to and independent of any other provision of this Agreement, and the existence of any claim or cause of action of the Employee against the Company or any shareholder, director or officer of the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants of the Employee contained in this Paragraph 8. (g) The provisions of this Paragraph 8 shall continue in effect notwithstanding termination of the Employee's employment hereunder for any reason. -6- 7 9. Confidentiality. The Employee recognizes and acknowledges that the Company's trade secrets and other confidential or proprietary information, as they may exist from time to time, are valuable, special and unique assets of the Company's business, access to and knowledge of which are essential to the performance of the Employee's duties hereunder. Accordingly, during the Employment Term and thereafter without limitation of time, the Employee shall hold in strict confidence and shall not, directly or indirectly, disclose or reveal to any person, or use for his own personal benefit or for the benefit of anyone else, any trade secrets, confidential dealings or other confidential or proprietary information of any kind, nature or description (whether or not acquired, learned, obtained or developed by the Employee alone or in conjunction with others) belonging to or concerning the Company or any of its subsidiaries, or any of their customers or clients or others with whom they now or hereafter have a business relationship, except (i) with the prior written consent of the Company duly authorized by its Board of Directors, (ii) in the course of the proper performance of the Employee's duties hereunder or (iii) as required by applicable law or legal process. The Employee confirms that all such information constitutes the exclusive property of the Company. The provisions of this Paragraph 9 shall continue in effect notwithstanding termination of the Employee's employment hereunder for any reason. 10. Business Records. Given the secretive and competitive environment in which the Company does business and the fiduciary relationship that the Employee will have with the Company hereunder, the Employee agrees to promptly deliver to the Company, upon termination of his employment hereunder, or at any other time when the Company so requests, all memoranda, notes, records, drawings, manuals and other documents (and all copies thereof and therefrom) in any way relating to the business or affairs of the Company or any of its subsidiaries or any of their clients, whether made or compiled by the Employee or furnished to him by the Company or any of its employees, customers, clients, consultants or agents, which the Employee may then possess or have under his control. The Employee confirms that all such memoranda, notes, records, drawings, manuals and other documents (and all copies thereof and therefrom) constitute the exclusive property of the Company. The obligation of confidentiality set forth in Paragraph 9 shall continue notwithstanding the Employee's delivery of any such documents to the Company. The provisions of this Paragraph 10 shall continue in effect notwithstanding termination of the Employee's employment hereunder for any reason. 11. Set Off. The Employee hereby grants to the Company the right to set off against, and authorizes the Company to deduct from, any payments to the Employee, or to his heirs, legal representatives or successors, provided for in this Agreement, any amounts which may be due and owing by the Employee to the Company, whether arising hereunder or otherwise. 12. Attorneys' Fees and Costs. In the event there is any litigation between the parties hereto with respect to this Agreement, the prevailing party in such litigation shall be entitled to recover all attorneys' fees and costs incurred by such party in connection with such litigation. 13. Injunctive Relief. In recognition of the fact that a breach by the Employee of any of the provisions of Paragraphs 8, 9 or 10 will cause irreparable damage to the Company for which monetary damages alone will not constitute an adequate remedy, the Company shall be entitled as a matter of right (without being required to prove damages or furnish any bond or other security) to obtain a restraining order, an injunction, an order of specific performance or other equitable or extraordinary relief from any court of competent jurisdiction restraining any further violation of such provisions by the Employee or requiring him to perform his obligations hereunder. Such right to equitable or extraordinary relief shall not be exclusive but shall be in addition to all other rights and remedies to which the Company may be entitled at law or in equity, including without limitation the -7- 8 right to recover monetary damages for the breach by the Employee of any of the provisions of this Agreement. 14. Jurisdiction and Venue. In respect of any action or proceeding arising out of or relating to this Agreement, each of the parties hereto consents to the jurisdiction and venue of any federal or state court located within Harris County, Houston, Texas, waives personal service of any and all process upon it or him, consents that all such service of process may be made by first class registered or certified mail, postage prepaid, return receipt requested, directed to it or him at the address specified in Paragraph 17, agrees that service so made shall be deemed to be completed upon actual receipt thereof and waives any objection to jurisdiction or venue of, and waives any motion to transfer venue from, any of the aforesaid courts. 15. Survival. Neither the expiration nor the termination of the term of the Employee's employment hereunder shall impair the rights or obligations of either party hereto which shall have accrued hereunder prior to such expiration or termination. The provisions of Paragraphs 6, 8, 9 and 10, and the rights and obligations of the parties thereunder, shall survive the expiration or termination of the term of the Employee's employment hereunder. 16. Source of Payments. All payments to the Employee provided in Paragraphs 4 and 6 shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established and no other segregation of assets shall be made to assure payment. The Employee shall have no right, title or interest whatever in or to any investments that the Company may make to aid the Company in meeting its obligations hereunder. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and the Employee or any other person. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company. 17. Notices. All notices, requests, demands and other communications required or permitted to be given or made hereunder by either party hereto shall be in writing and shall be deemed to have been duly given or made (i) when delivered personally, (ii) when sent by telefacsimile transmission or (iii) when deposited in the United States mail, first class registered or certified mail, postage prepaid, return receipt requested, to the party for which intended at the following addresses (or at such other addresses as shall be specified by the parties by like notice, except that notices of change of address shall be effective only upon receipt): -8- 9 If to the Company, at: Triton Engineering Services Company 1201 Dairy Ashford Houston, Texas 77079 Fax No. 713-556-9074 If to the Employee, at: Joseph E. Beall c/o Triton Engineering Services Company 1201 Dairy Ashford Houston, Texas 77079 Fax No. 713-556-9074 18. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto concerning the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to such subject matter. The Employee and the Company expressly acknowledge and agree that the employment agreement dated January 1, 1993 between the Employee and the Company is superseded by and terminated effective upon the execution and delivery of this Agreement. 19. Binding Effect; Assignment; No Third Party Benefit. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, however, that the Employee shall not assign or otherwise transfer this Agreement or any of his rights or obligations hereunder without the prior written consent of the Company (except that any rights that the Employee may have hereunder at the time of his death may be transferred by will or pursuant to the laws of descent and distribution). Nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties hereto, and their respective heirs, legal representatives, successors and permitted assigns, any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. 20. Nonalienation of Benefits. The Employee shall not have any right to pledge, hypothecate, anticipate or in any way create a lien upon any payments or other benefits provided under this Agreement; and no benefits payable hereunder shall be assignable in anticipation of payment either by voluntary or involuntary acts, or by operation of law, except by will or pursuant to the laws of descent and distribution. 21. Amendment. This Agreement may not be modified or amended in any respect except by an instrument in writing signed by both of the parties hereto. 22. Waiver. Any term or condition of this Agreement may be waived at any time by the party hereto which is entitled to have the benefit thereof, but such waiver shall only be effective if evidenced by a writing signed by such party, and a waiver on one occasion shall not be deemed to be a waiver of the same or any other type of breach on a future occasion. No failure or delay by a party hereto in exercising any right or power hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right or power. -9- 10 23. Authority. No person, other than pursuant to a resolution of the Board of Directors of the Company or a committee thereof, shall have authority on behalf of the Company to agree to modify, amend, or waive any provision of this Agreement or anything in reference thereto. 24. Severability. If any provision of this Agreement is held to be unenforceable, (a) this Agreement shall be considered divisible, (b) such provision shall be deemed inoperative to the extent it is deemed unenforceable and (c) in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law. 25. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. 26. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only, do not constitute a part of this Agreement and shall not affect in any manner the meaning or interpretation of this Agreement. 27. References. All references in this Agreement to Paragraphs, subparagraphs and other subdivisions refer to the Paragraphs, subparagraphs and other subdivisions of this Agreement unless expressly provided otherwise. The words "this Agreement", "herein", "hereof", "hereby", "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. Whenever the words "include", "includes" and "including" are used in this Agreement, such words shall be deemed to be followed by the words "without limitation". Words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. 28. Counterparts. This Agreement may be executed by the parties hereto in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. -10- 11 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer, and the Employee has executed this Agreement, as of the date first set forth above. TRITON ENGINEERING SERVICES COMPANY By: /s/ CHARLES R. ERICKSON Name: Charles R. Erickson Title: Secretary "COMPANY" /s/ JOSEPH E. BEALL Joseph E. Beall "EMPLOYEE" -11- EX-10.3 5 LEASE INDEMNITY AGREEMENT DATED APRIL 22, 1994 1 LEASE INDEMNITY AGREEMENT THIS LEASE INDEMNITY AGREEMENT (this "Agreement") is made and entered into as of April 22, 1994, by and among Joseph E. Beall, a resident of Harris County, Texas ("Beall"), Triton Engineering Services Company, a Texas corporation ("TESCO"), 1201 Dairy Ashford Ltd., a Texas limited partnership ("1201"), and Noble Drilling Corporation, a Delaware corporation ("Buyer"). RECITALS 1. TESCO and 1201 are tenant and landlord, respectively, under that certain Office Building Lease Agreement dated January 29, 1991 (the "Lease") under which TESCO leases 57,812 square feet of rentable area in 1201's office building located at 1201 Dairy Ashford, Houston, Harris County, Texas (the "Property"). 2. Beall owns substantially all of the capital stock of TESCO and a majority in limited partnership interest in 1201. TESCO owns all of the issued and outstanding capital stock of 1201 Dairy Ashford, Inc., a Texas corporation that is the sole general partner of 1201 (the "General Partner"). 3. Buyer has agreed to purchase all of the issued and outstanding capital stock of TESCO from Beall and the other shareholder of TESCO (the "Acquisition"), pursuant to that certain Stock Purchase Agreement of even date herewith among Beall, the other shareholder of TESCO, TESCO and Buyer (the "Stock Purchase Agreement"). Buyer, Beall and TESCO have agreed that TESCO will distribute all of the issued and outstanding capital stock of the General Partner to Beall and forgive all debt owed by 1201 to TESCO prior to the consummation of the Acquisition. 4. As a condition to the consummation of the Acquisition, Buyer has required that Beall execute this Agreement providing for the indemnification of Buyer for the amount of rent TESCO is required to pay under the Lease (i) in excess of the gross rental per square foot to which Buyer and Beall have agreed, and (ii) on account of space deemed by Buyer to be in excess of TESCO's current needs. Such indemnification, and the other agreements contained herein, shall in no way impair, diminish or relieve TESCO of its obligations under the Lease, but shall be an independent contract and agreement between Beall, 1201, Buyer and TESCO. 5. The Aid Association for Lutherans, a Wisconsin corporation ("AAL"), the holder of the senior debt on the Property and the assignee of the Lease, has been notified of the transfer of all of the issued and outstanding capital stock of the General Partner to Beall and of the other transactions and agreements contained in this Agreement and has given its consent thereto. AGREEMENT In consideration of the premises and the respective agreements of the parties contained herein, it is agreed as follows: 2 Section 1. Indemnity for Rent. 1.1 Calculation of Amount. Subject to this Agreement's terms and conditions, Beall shall indemnify Buyer to the extent that the gross rent (the "Gross Rent") due under the Lease (consisting of Base Rental plus Actual Operating Costs, as such terms are defined in the Lease) exceeds $9.00 per square foot for the 43,310 rentable square feet to be used by TESCO following the Acquisition, and for all Gross Rent with respect to the 14,502 rentable square feet described in the Lease as the second floor of the North Pod (the "Excess Area"), which has been deemed unnecessary by Buyer as of this time. 1.2 Payment of Indemnity. To the extent possible, amounts due by Beall to Buyer hereunder as of the Determination Date, as such term is defined in the Stock Purchase Agreement (the "Determination Date Rental Indemnification Amount"), shall be satisfied under the provisions of Section 1.3(c) of the Stock Purchase Agreement. To the extent that amounts due under this Agreement cannot be, or are not, satisfied thereunder, then Beall shall pay to Buyer in cash the amount due within thirty days of the presentation of an invoice by or on behalf of Buyer to Beall showing, in reasonable detail, the calculation of the amount due. Section 2. Sublease of Excess Area. Upon the instruction of 1201, TESCO agrees to enter into a sublease of all or any part of the Excess Area to a third party on terms and conditions acceptable to 1201 in its sole discretion; provided, however, that any such sublease shall be approved by AAL to the extent AAL has a right to require such approval, and further provided that neither Buyer nor TESCO shall have any affirmative duty to seek to sublease all or any part of the Excess Area and that any such sublease shall not require TESCO to assume any obligation or duties other than the demise of the Excess Area. Beall agrees to confer with Buyer prior to concluding the sublease of all or any part of the Excess Area to a third party regarding the proposed sublessee and to obtain Buyer's consent to the identity of such sublessee, which consent shall not be unreasonably withheld. If TESCO desires to use all or any part of the Excess Area, such use shall be deemed a sublease subject to the terms of the preceding sentence. TESCO's proceeds from any such sublease shall reduce Beall's indemnity obligation under Section 1 above on a dollar for dollar basis. Section 3. Term and Renewal. This Agreement shall terminate on the third anniversary of the closing date of the Acquisition. Thereafter, the parties shall negotiate in good faith to extend the term and adjust Beall's indemnity obligation so that TESCO's effective lease rate and term are equivalent to those obtainable on the open market for buildings similar to the Property. Notwithstanding the foregoing, upon payment in full of all indebtedness of 1201 to AAL, Beall shall have the right to refuse to extend this Agreement past its termination, and 1201 shall have the right to terminate the Lease without further obligation. Further, if despite their good faith efforts to renew and extend this Agreement, Buyer and Beall are unable to agree on an effective rental rate and term, or if 1201 shall sell the Property to or assign the Lease to a third party prior to the third anniversary of the closing date of the Acquisition, Beall agrees to indemnify TESCO for any and all obligations or liabilities TESCO may incur to 1201, its general and limited partners, to AAL, or to such third party, or to their respective affiliates, in the event TESCO breaches the Lease. Section 4. Miscellaneous. 4.1 Notices. All notices, waivers, statements and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been effectively given when personally delivered, sent by telefax with copy by United States mail, or deposited in the United -2- 3 States mail, postage prepaid, registered or certified, return receipt requested, addressed to the respective parties at the addresses appearing below or at such other address as may be designated from time to time by like notice. If to Buyer or TESCO: Noble Drilling Corporation 10370 Richmond Avenue, Suite 400 Houston, Texas 77042 Attention: Mr James C. Day, President and Chief Executive Officer Telefax: 713-953-1126 If to Beall or 1201: Mr. Joseph E. Beall 1201 Dairy Ashford Houston, Texas 77079 Telefax: 713-556-9074 4.2 Expenses. Each of the parties to this Agreement shall pay its respective expenses incurred in connection with this Agreement, including without limitation attorneys' and professional fees. 4.3 Amendments. This Agreement, the Stock Purchase Agreement, and the Lease set forth the entire understanding between the parties hereto with respect to the subject matter hereof, oral or written, and supersede all prior agreements and understandings between them with respect to the subject matter hereof. All of such prior understandings and agreements (if any exist) are merged with and into this Agreement. The parties hereto may amend or modify this Agreement only by a written instrument executed by all of the parties hereto. 4.4 Binding Effect. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives, successors and assigns. 4.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall be deemed for all purposes to be one agreement. 4.6 Governing Law. This Agreement shall be governed by, and construed in accordance with the laws of the State of Texas, without regard to its conflict of laws rules. 4.7 Assignment. No party hereto may assign all or any part of its interests, obligations or rights under this Agreement to any person or entity without the prior written consent of the other parties hereto. 4.8 Gender; Number. Unless the context otherwise requires, the singular number shall include the plural and vice versa, and each gender shall include each other gender. 4.9 Captions. The captions contained in this Agreement are solely for convenient reference and shall not be deemed to affect the meaning of any article, section or paragraph hereof. -3- 4 4.10 Severability. If any one or more of the provisions of this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been a part hereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. TRITON ENGINEERING SERVICES COMPANY By: /s/ Charles R. Erickson _________________________________ Charles R. Erickson, Secretary /s/ JOSEPH E. BEALL JOSEPH E. BEALL 1201 DAIRY ASHFORD LTD. By: 1201 DAIRY ASHFORD, INC. its general partner By: /s/ Joseph E. Beall ________________________ NOBLE DRILLING CORPORATION By: /s/ James C. Day ____________________________________ James C. Day CEO & President STATE OF TEXAS ) ) COUNTY OF HARRIS ) ACKNOWLEDGED BEFORE ME on this 22nd day of April, 1994 by Charles R. Erickson, Secretary of Triton Engineering Services Company, a Texas corporation, to certify which witness my hand and seal of this office. -4- 5 /s/ Diana Wiley Armbrust ____________________________________ Notary Public in and for The State of T E X A S My Commission Expires: October 17, 1996 ____________________________________ -5- 6 STATE OF TEXAS ) ) COUNTY OF HARRIS ) ACKNOWLEDGED BEFORE ME on this 22nd day of April, 1994 by Joseph E. Beall, to certify which witness my hand and seal of this office. /s/ Diana Wiley Armbrust ____________________________________ Notary Public in and for The State of T E X A S My Commission Expires: October 17, 1996 ____________________________________ STATE OF TEXAS ) ) COUNTY OF HARRIS ) ACKNOWLEDGED BEFORE ME on this 22nd day of April, 1994 by Charles R. Erickson, Secretary of 1201 Dairy Ashford, Inc., a Texas corporation, on behalf of said corporation in its capacity as General Partner of 1201 Dairy Ashford Ltd., to certify which witness my hand and seal of this office. /s/ Diana Wiley Armbrust ____________________________________ Notary Public in and for The State of T E X A S My Commission Expires: October 17, 1996 ____________________________________ -6- 7 STATE OF TEXAS ) ) COUNTY OF HARRIS ) ACKNOWLEDGED BEFORE ME on this 22nd day of April, 1994 by James C. Day, CEO & President of Noble Drilling Corporation, a Delaware corporation, to certify which witness my hand and seal of this office. /s/ Diana Wiley Armbrust ____________________________________ Notary Public in and for The State of T E X A S My Commission Expires: October 17, 1996 ____________________________________ -7- EX-99.1 6 NEWS RELEASE DATED APRIL 25, 1994 1 NOBLE DRILLING CORPORATION 10370 RICHMOND AVENUE, SUITE 400 (NOBLE LOGO) HOUSTON, TX 77042 NEWS PHONE: 713-974-3131 FAX: 713-974-3181 - - -------------------------------------------------------------------------------- NOBLE DRILLING CORPORATION COMPLETES ACQUISITION OF TRITON ENGINEERING SERVICES COMPANY HOUSTON, Texas, April 25, 1994 -- Noble Drilling Corporation has completed its acquisition of Triton Engineering Services Company and its subsidiaries. The parties announced in January 1994, that they had signed a letter of intent for the transaction, which was closed by the purchase by Noble Drilling of all of the outstanding shares of stock of Triton. Triton Engineering Services Company was founded by Joseph E. Beall in 1977. Beall, who owned a substantial majority of Triton's stock, will continue to serve as Triton's president. Trition provides engineering, consulting and "turn-key" drilling services, and manufacturing and rental of oil field equipment for the oil and gas industry. The consideration paid by Noble Drilling consisted of a combination of Noble Drilling common stock, cash and a six-month promissory note, plus additional consideration contingently payable at the end of two years, subject to reduction in certain events, and based in part on Triton's financial performance in 1994. James C. Day, Chairman, President and Chief Executive Officer of Noble Drilling Corporation, said "This acquisition represents a continuation of our efforts to expand the overall operational services provided by the company. Triton will augment our ability to compete in this important and evolving segment of the drilling industry." -more- 2 Noble Drilling will schedule a teleconference with analysts on April 29, 1994 at 10:00 a.m., central daylight time, at which time management will be available to discuss the acquisition. Noble Drilling Corporation is a major drilling contractor with offshore and land operations in the United States, Canada, the United Kingdom, Africa, South America, Venezuela, the Middle East and the Far East. The company's outstanding Common Stock and $2.25 Convertible Exchangeable Preferred stock are traded in the NASDAQ/NMS under the symbols "NDCO" and "NDCOP", respectively. ### NDC-126 4/25/94 For additional information, contact: Byron L. Welliver, Senior Vice President-Finance and Treasurer, Noble Drilling Corporation 713-974-3131. -----END PRIVACY-ENHANCED MESSAGE-----